Today, Austin Smith discusses why he thinks the credit card delinquency rate will so important to watch when JPMorgan (NYSE: JPM) and Wells Fargo (NYSE: WFC) release their earnings reports on Friday. The average delinquency rate for big banks is approaching 2%, or nearly half of 2009 levels, and a surprisingly low rate for either bank could mean huge long-term benefits, particularly for beleaguered JPMorgan. Investors need to remember that a low delinquency rate does not make JP Morgan a buy by itself, but a decline could definitely add to the overall argument.

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Austin Smith owns shares of Wells Fargo & Company. The Motley Fool owns shares of Bank of America, Citigroup, JPMorgan Chase & Co., and Wells Fargo & Company and has the following options: short APR 2012 $21.00 puts on Wells Fargo & Company, short APR 2012 $29.00 calls on Wells Fargo & Company, short OCT 2012 $33.00 puts on Wells Fargo & Company, and short OCT 2012 $36.00 calls on Wells Fargo & Company. Motley Fool newsletter services recommend Wells Fargo & Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.