What is 'Roll Rate'

Roll rate refers to the percentage of credit card users who become increasingly delinquent on their accounts. The roll rate is the percentage of card users who "roll" from the 60-days late to the 90-days late category, or from the 90-days late to the 120-days late category, and so on. In the credit card industry, creditors report late payments in 30-day increments beginning with the 60-days late category and ranging through 90-days late, 120-days late, 150-days late and so on up to charge-off. Charge-offs are subject to private company discretion and state laws. For federal loans charge-off is required after 270 days according to federal regulation.


Roll rates are used by banks to help manage and predict credit losses based on delinquency.

Calculating Roll Rates

Financial institutions have varying methodologies for calculating roll rates. They may calculate roll rates by the number of borrowers in delinquency or the amount of funds delinquent.

For example, if 20 out of 100 credit card users who were delinquent after 60 days are still delinquent after 90 days, the 60-to-90 days roll-rate is 100%. Furthermore, if only 10 out of 20 credit card issuers who were delinquent at 60 days are now delinquent at 90 days the roll rate would be 50%.

When considering delinquency roll rates by balances a bank will base their calculations on total delinquent balances. For instance, if the 60-day delinquent balance for a small bank's credit card portfolio in February is $100 million, and the 90-day delinquent balance for March is $40 million, the 60-to-90 day roll-rate in March is 40% (i.e. $40 million/$100 million). This implies that 40% of the $100 million receivables in the 60-day bucket in February have migrated to the 90-day bucket in March.

Credit card issuing banks estimate credit losses by segregating their overall credit card portfolio into delinquency "buckets," similar to the 60-day, 90-day categories mentioned earlier. A bank's management measures roll rates for the current month and current quarter, or an average of several months or quarters to smooth out fluctuations. Roll rates may also be further broken down by product category or borrower quality to gain a better understanding of delinquencies overall.

Credit Loss Provisions

Once roll rates are determined, they are applied to the outstanding receivables within each bucket, and the end results are aggregated to estimate the required allowance level for credit losses. Financial institutions typically update credit loss provisions in their financial statements quarterly. Credit loss provisions are generally an expense or liability that a bank writes off. Banks have differing methodologies for determining credit loss provisions with typically only a portion of delinquent balances written off in early delinquencies. Banks closely monitor roll rates and credit loss provisions to gauge the risks of borrowers. Roll rates can also help credit issuers to set underwriting standards based on repayment trends for various types of products and different types of borrowers.

  1. Delinquency Rate

    A delinquency rate is the percentage of loans within a loan portfolio ...
  2. Delinquent

    Delinquent describes the failure to accomplish what is required ...
  3. Delinquent Account

    A delinquent account is a credit account on which a consumer ...
  4. Credit Card Authorized User

    Definition of an authorized user of a credit card.
  5. Credit Card Balance

    Credit card balance is the amount of charges, or lack thereof, ...
  6. Straight-Roller

    A credit card account which is increasingly delinquent, and in ...
Related Articles
  1. Personal Finance

    How Credit Cards Affect Your Credit Rating

    The average American household has four cards, but does that mean more is better?
  2. Personal Finance

    Take Control Of Your Credit Cards

    The plastic in your wallet doesn't have to hurt your finances. Learn how to manage it responsibly.
  3. Personal Finance

    New Rules That Could Trash (or Help) Your Credit

    Cable bills and similar financial obligations will soon be factored into your credit score. Good news if you're an on-time payer. If not, become one!
  4. Personal Finance

    Don't Get Trapped by Subprime Credit Cards

    Beware of subprime credit cards. It may be easy credit access, but can take advantage of your poor credit score and eventually catch you in a debt spiral.
  5. Personal Finance

    Credit Card or Cash?

    Credit cards are convenient to use, but not always the best choice. Here are 5 times you shouldn't pay with a credit card – and 5 times you should.
  6. Personal Finance

    4 Unexpected Things That Lower Your Credit

    It's important to maintain a good credit score. Discover what could be lowering it without your knowledge.
  7. Personal Finance

    How Many Credit Cards Should You Have?

    National stats indicate most consumers have three or more cards - are you one of them?
  8. Personal Finance

    Everything You Need To Know About Credit Card Rates

    Understanding credit card rates will help you choose the right credit card, and avoid any unpleasant surprises.
  9. Personal Finance

    Credit Card Tutorial

    Credit cards can be a useful tool if you know what you are getting into. Learn the risks, rules, history of credit cards.
  1. What are the differences between delinquency and default?

    Find out more about loan delinquency, loan default, and the difference between a loan borrower defaulting and being delinquent ... Read Answer >>
  2. Can a creditor sue me for a delinquent account?

    Learn what happens when an account is delinquent and read about the regulations that protect consumers who have delinquent ... Read Answer >>
Trading Center