More consumers paying credit cards on time
Credit card delinquency rate drops
The national credit card delinquency rate dropped quarter-over-quarter, reverse the recent trend of increases seen with late payments, TransUnion said in a recent report.
TransUnion, which considers a borrower to be delinquent is he/she is 90 or more days past due, reported that the delinquency rate – on a national level – for credit card users dropped to 0.73 percent in the first quarter (Q1) of 2012, a decrease from 0.78 percent in the fourth quarter (Q4) of 2011.
The current 0.73 percent mark is well below historical norms, TransUnion said.
Not only have more consumers been paying credit cards on time, but the average credit card debt (per borrower) decreased from $5,204 in Q4 2011 to $4,962 in Q1 2012. These decreases are a reversal from what was seen in the last half of 2011, when both the national delinquency rate and average credit card debt per borrower showed increases.
“After two consecutive quarters of increases in both the delinquency rate and average debt, it is encouraging to see a return to declines in delinquency,” Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit, said in a statement. “This contributed positively to a general trend since the bottom of the recession, which saw delinquency rates remain at near-record lows.”
On a regional level, 72 percent metropolitan statistical areas (MSAs) experienced similar or lower credit card delinquency rates from Q4 2011 to Q1 2012.
“We continue to see improvements in high-risk states such as Arizona, California, Florida and Nevada,” Becker said. “It is heartening to see this rebound in some of the states hit hardest by the recession.”
TransUnion forecasts that the national credit card delinquency rate will remain near current levels – with some seasonal fluctuations – through the remainder of 2012.