Consumer credit card debt rises, as does delinquency rate
Consumers take on more credit card debt
Consumers piled up more credit card debt and also paid late more often in the fourth quarter (Q4) of 2012, TransUnion said in a recent report.
According to TransUnion’s quarterly analyses of credit-active U.S. consumers, average credit card debt rose quarter-over-quarter, as did the national credit card delinquency rate.
Average credit card debt per borrower rose from 2.5 percent on a quarterly basis – from $4,966 in the third quarter (Q3) of 2012 to $5,122 in Q4. Additionally, the credit card delinquency rate rose from 0.75 percent in Q3 to 0.85 percent in Q4.
“The fourth quarter traditionally results in higher credit card balances and delinquencies, much of it to do with the holiday shopping season,” Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit, said in a statement.
On a year-over-year basis, the national credit card delinquency rate rose from 0.78 percent (Q4 2011) to the aforementioned 0.85 percent in Q4 2012, but average credit card debt actually dropped. Average credit card debt per borrower was $5,204 in Q4 2011, so the Q4 average of $5,122 represents a 1.6 percent drop.
Becker continued: “Though serious delinquencies have risen seven basis points in the last year, average credit card debt has actually dropped, which is a sign that consumers continue to manage their credit well. Both credit card delinquencies and balances are below historic norms.”
Over the past decade, the national credit card delinquency rate has come in at an average of 1.06 percent in the final quarter of the year. The highest Q4 delinquency rate in the past 10 years was in 2003, when 1.42 percent of credit card borrowers were delinquent.
Average credit card debt per borrower in Q4 during the past decade is $5,389, TransUnion said, with the highest mark registered in 2009 ($5,729).
“Consumers continue to value their credit card relationships and are diligent about paying off their balances in a timely fashion,” Becker said. “This is a positive sign as more and more subprime borrowers have either entered or re-entered the credit card market.”