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More consumers pay credit card bills late in Q3

More consumers pay credit card bills late in Q3

Credit card delinquency rate rises

The credit card delinquency rate on a national level rose in the third quarter (Q3) of 2012, TransUnion said in a recent report.

According to TransUnion, the national rate of credit card borrowers who were 90 or more days late in Q3 rose to 0.75 percent, up from the season low of 0.63 percent observed the second quarter (Q2) of 2012.

A year earlier in the third quarter (Q3) of 2011, the national delinquency rate came in at 0.71 percent.

“Credit card delinquencies are following a pattern similar to what we observed in 2011, with declines in the first two quarters of the year followed by an increase in the third,” Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit, said in a statement.

A majority of states (36) experienced a yearly increase in credit card delinquency rates in Q3. Five states remained even and nine states experienced yearly decreases in delinquency rates in Q3.

Breaking it down even further, 64 percent of metropolitan statistical areas (MSAs) experienced year-over-year spikes in credit card delinquency rates in Q3.

This is similar to the previous quarter (Q2 2012), when a yearly rise was observed in 63 percent of MSAs.

The rise in delinquency rates comes alongside separate data that shows an increase in new credit card accounts being given to non-prime borrowers.

Non-prime credit card applicants received a 29.55 percent share of all new credit card accounts in Q2 2012, up from 29.28 percent in Q2 2011 and 23.86 percent in Q2 2010.

“It is possible that the slight increase in delinquencies year over year can be attributed in part to the increased share among non-prime borrowers of new accounts, but even so these delinquency numbers are not a cause for concern,” Becker said. “We’ve found that consumers continue to value their credit cards more than ever, and will likely do so at least until unemployment further abates.”

According to the report, TransUnion predicts that credit card delinquencies will stay relatively flat (with some seasonal fluctuations) through the end of 2012.


Posted in: Business Credit Cards, Consumer Credit Cards, Student Credit Cards


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