The delinquency rate on credit card accounts dropped
during the second quarter of 2012 to one of its lowest levels since 1994.
According
to a TransUnion study released today, the delinquency rate–the percentage of
credit card borrowers at least 90 days past due on their accounts–dropped to
0.63 percent in the second quarter from 0.73 percent in the first quarter.
The
delinquency rate on credit cards is at its lowest level since the
second quarter of last year when it was 0.60 percent. Besides that quarter, the
last time the delinquency rate was below its current level was 1994.
“The
national credit card delinquency rate continues to remain at the lowest levels
we’ve observed in 18 years,” said Ezra Becker, vice president of research and
consulting in TransUnion’s financial services business unit, in a statement.
“These low delinquency rates reflect both continued conservatism in lender
underwriting and the ongoing prioritization of card payments among consumers.”
The
low delinquency rate is especially impressive given the fact that consumers
increased their overall credit card debt during this second quarter.
The
average credit card debt per borrower rose 5.7 percent in the past year, from
$4,699 in the second quarter of 2011 to $4,971 during 2012′s second quarter.
This
average is well below the $5,719 that consumers carried during the second
quarter of 2009.
Consumers
need to be cautious. We can’t let our credit card debt continue to increase or
we will eventually see a rise in the default and delinquency rates. It is
critical for consumers to pay off as much of their credit card balance as
possible on time each month.
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