Target Card Charge Offs Rise 10%

Target Corp. released yesterday the latest monthly update on its credit card master trust as it decides whether to sell the portfolio.

Receivables as of the month ended Dec. 1 were $8.0 billion, the first time the portfolio had surpassed that threshold. The yield on the card portfolio was 19.35 percent, compared with 20.39 percent in the previous reporting month.

The retailer reported gross defaults (charge offs) of nearly $49.7 million and recoveries of $6.2 million during the month, leaving total charge offs of $43.4 million. Net charge offs as a percentage of annualized principal receivables was 7.05 percent, up nearly 10 percent from the 6.42 percent in net charge offs reported for the previous month.

Total delinquencies, including missed payments of 2 months, 3 months and 4 or more months, were $469.9 million. That was an increase of 5.7 percent from the $444.4 million in total delinquencies in the previous monthly reporting period.

Target reported the numbers in a filing with the U.S. Securities and Exchange Commission. Target announced it was shopping the portfolio in September, but said this week it wouldn’t make a decision until the first quarter of next year ("Target Corp. to Decide on Card Sale in First Quarter of 2008," Dec 19).