Portfolio yield
Asset-Backed Securities glossary · Asset Specific Nuances
Definition
For credit card ABS, the annualized yield earned on the receivables (finance charges plus fees plus interchange) as a percentage of principal.
Portfolio yield in plain English
Portfolio yield measures how much money a pile of credit card balances actually earns each year, stated as a percentage of the amount owed. It adds up the interest charges cardholders pay, the fees (like late fees), and "interchange" (the small cut the card network collects from merchants on every swipe), then compares that total to the outstanding principal. If a $100 balance generates $18 a year from all those sources, the portfolio yield is about 18%. Investors watch it closely because it's the income engine of the deal, the gross earnings that must cover losses, expenses, and still pay bondholders.
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