Anticipating that Discover Financial Services will report very little change in charge-offs and delinquency rates for its credit card loan book during May, Stifel Nicolaus analyst Christopher Brendler on Wednesday suggested that the economic stimulus checks will have a scant impact on cardholder payments.

In a securitization prospectus Discover filed Wednesday, the issuer disclosed some May data: Total 30+ day delinquencies fell 4 basis points; 30- to 59-day delinquencies fell 1 bps; 60- to 89-day delinquencies fell 5 bps; and 90-plus day delinquencies increased 2 bps.

"While this is some improvement," said Brendler, roll rates – the amount of late payments moving from one delinquency bucket to the next – "were very stable month over month, suggesting that the fiscal stimulus had little impact."

He says some impact could show up in June's data because the Treasury made its stimulus check direct deposits between May 2 and 16, and paper check payments between May 16 to June 11.

However, "We think a better explanation is that the stimulus benefit is getting offset by additional macroeconomic pressure," Brendler said in his report. "Credit card asset quality has been slowly deteriorating for almost a year now and we have seen weakness accelerate recently on a seasonally adjusted basis."

He forecasts card delinquency trends will "get worse as the year progresses."

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