In aggregate, consumers across all income levels still have excess savings also from the pandemic, although those numbers are declining. Inflation has moderated to the point that real wages are growing again after shrinking for almost two years. Student loan repayments, now they resumed in October, but there is the 12-month on-ramp period and a new income-driven repayment plan, which will significantly reduce payments for lower-income borrowers. So, on the whole, I’d say, consumers are in really quite good shape relative to most historical benchmarks. Then if we look inside our own portfolio, we still see higher average payments compared to 2019 by segment, by a really pretty sizable delta. We — and then we then look at the marketplace. And you’ve seen in the auto business how at times we get alarmed by some of the practices or the pricing in the industry.
And we pulled back in ways that we haven’t pulled back in the card business. But I think we see a rationale and stable competitive marketplace, it’s very competitive, but it’s rationale and stable. And then most importantly, the results themselves. The — our vintages just continue to come in on top of prior vintages. The trimming around the edges that we’ve done over the last few years have really I think allowed our results to have a stability to them that even has diverged from the sort of underlying, not as good performance of — in the marketplace of things recently compared to the past, but we have that real stability. Then we see the leveling-off of our portfolio. And really we talk about our charge-offs leveling off at a level that — like 15% above 2019.
It’s interesting actually that’s net charge-offs, but gross charge-offs are leveling-off very close to the gross charge-off levels of 2018 and 2019. And actually, the thing that creates the differential is the lower recoveries that we’ve had for as a — in the wake of the inventory of recoveries being so much lower inventory of charge-off debt. So pulling way up and seeing the traction in our business, the success with our brand, the things that for competitive reasons we don’t share in the marketplace, but the traction on the tax side, in terms of enabling us to create better — really unique customized customer experiences, totally customized underwriting. The reaching to marketing channels that we hadn’t even tapped before. All of this is putting us in a position to continue to — pulling way up, obviously in the credit business, we always worry a lot.
But if I calibrate this relative to a lot of other times, I feel really quite good about this. And I actually said I felt a lot less good a couple of years ago. Because I felt that the pandemic, while, from a credit point of view, who couldn’t like those credit results, I said, it actually is so abnormally good. The marketplace won’t be able to help itself but create unusual practices, unresilient underwriting, et cetera. So, actually what we’ve had, if I can borrow the soft landing term from the economy conversations is kind of a soft landing, relative to the credit business, and landing is really quite the right word, relative to Capital One, which I think really as I’ve kind of declared today, sort of landed here. And I know some competitors still haven’t fully landed, but pulling way up on this.
I actually feel this is really quite a good time if I calibrate to all the times over the years in this exciting journey.
Jeff Norris: Next question, please.
Operator: Our final question comes from the line of Dominick Gabriele with Oppenheimer. Your line is open.
Dominick Gabriele: Hey, great. Thanks so much for all the color on the call today. I just have two questions. Rich, what are you seeing you think that’s making the net charge-off stabilize 15% above 2019 levels? Is there something in the consumer payment behavior that’s changed? Is there something you think that shifted the consumer, in general, where the credit card industry may be seeing a higher through-the-cycle net charge-off rate going forward or for Capital One in particular? And I just have a follow-up. Thanks so much.
Richard Fairbank: So, I actually believe that what we’re really seeing here is a credit situation that’s very similar to pre-pandemic. It is showing up right now and I’m going to speak through the Capital One lens. I think I’m not going to universalize for the industry. But as I mentioned in the — to the prior answer there, that if you look at gross charge-offs, where they’re settling out for Capital One, now this is Capital One that has done a lot of trimming around the edges over the last — a fair amount of trimming around the edges. I think we also did a very important choice that I’m not sure was universe, it might have been an unusual choice. But when we saw the incredibly strong credit performance of consumers, much of it driven by stimulus and forbearance, we sort of became alarmed about credit scores, great inflation if you will, and essentially intervened in our models to normalize.
So that we didn’t get fooled by that. But yes, this is the — and so as a result of that, we have stabilized. We’re probably one of the first players to stabilize and we have stabilized at this moment at 15%, above 20% — say, benchmark to 2019 levels. Already we said that number from a gross charge-off number is really sort of very close to 2019 levels. So the recoveries effect, which is a temporary effect that our recoveries are so much lower because they just don’t have as much inventory of charge-offs to collect on. That’s a good guy that should help over time. So, I think also as we’ve talked about and we’ve talked about ever since the pandemic sort of — we started coming out the other side of the pandemic, we said there is another effect.
