Credit Card Delinquencies Fall Again As Consumers Shape Up

Aug 14th, 2013 @ 7:01 PM by Amber Nelson

American consumers continued to put their best financial foot forward during the second quarter of this year, according to recent data from TransUnion Corp, as they paid down their credit card debt and made more payments on time.

Consumers had an average credit card debt of $4,965 during the second quarter. While that is up from $4,875 during the first quarter, it is down 0.12 percent compared with the previous year. To put it into perspective, the average second quarter credit card debt since 2000 has been $5,169.

And delinquencies fell to an almost 20-year low. Credit card accounts that were delinquent by at least 90 days fell to 0.57 percent of all accounts, down from 0.63 percent during the second quarter of 2012 and down from 0.69 percent in the first quarter. The last time the rate was that low was in the second quarter of 1994 when it hit 0.56 percent. The average delinquency rate during the second quarter since 2000 has been much higher at 1.09 percent.

“Despite recent improvements in the employment situation, consumers continue to value their credit card relationships as a primary means of liquidity. This is best demonstrated by the historically low credit card delinquency rates we observe today,” said Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit in a statement. “Credit card debt also remains relatively low, and while we did observe a quarterly rise in debt, we would need to see a few more quarters of increases to describe it as a significant trend. Having said that, the data supports that consumers will continue to prioritize their credit card relationships over other credit obligations, and delinquencies should remain low into the near future.”

The improvements are widespread, according to TransUnion, as 74 percent of the metro areas it tracked had yearly declines in their delinquency rates. Seattle led the pack with a 26.5 percent drop from the 2012 second quarter. Denver also had a sizable decline, falling 21.4 percent and Minneapolis was a close third with a 21.3 percent drop from the previous year.

Based on the current pace of the economy, TransUnion expects things to remain fairly constant into the third quarter when they predict the delinquency rate will be 0.60 percent.

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.

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Consumer Delinquencies Fell in Third Quarter

Jan 15th, 2014 @ 9:48 PM by Amber Nelson

Consumers did better at managing their debt in six of eight different loan categories in the 2013 third quarter, according to a recent survey from the American Bankers Association.

The ABA’s Consumer Credit Delinquency Bulletin found that all taken together Americans were delinquent – by 30 days or more – on 1.63 percent of all their loans, down from 1.76 percent in the second quarter and a record low. By comparison, the average rate of that composite ratio has been 2.35 percent for the last 15 years.

“More jobs and higher income are a recipe for lower delinquencies,” said James Chessen, ABA’s chief economis in a statement. “Consumers also continue to do a good job of monitoring their finances and keeping debt at manageable levels.”

The ABA reported that delinquencies declined in the following loan categories: personal loans, indirect auto loans, mobile home loans, RV loans, marine loans and home equity loans. Direct auto loans did not see a change in the delinquency rate at 0.88 percent, but the one increase was in property improvement loans where the number of accounts behind on payments rose to 1.25 percent in the third. quarter from 0.80 percent in the second.

The ABA also tracks a few “open-end” loans, including bank cards, home equity lines of credit and non-revolving loans. The biggest surprise among those was an jump in bank card delinquencies, which rose to 2.42 percent from 2.55 percent. Still, Chessen pointed out that even the current rate is 30 percent lower than the 15-year average.

He predicted that things will continue to get better but warned consumers to be watchful.

“Delinquencies are likely to remain at reasonably low levels for the next several quarters as the economy continues to improve and jobs and income continue to grow,” Chessen said.  “At the same time, consumers can’t afford to be complacent when it comes to keeping debt levels under control.”

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.

View the original article here