Credit Card Delinquency Rate Falls

Posted by Bill Crowley on August 16 2011 @ 3:05 pm

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Credit card delinquency rates fell to the lowest levels since 1994. In an effort to keep their credit ratings in good standings, consumers are repaying their credit card debt in a timely manner, with delinquency rates for the second quarter of 2011 reaching the lowest levels experienced since the third quarter of 1994, according to a new report. Delinquency rates dropped to 0.6 percent, which is down nearly 19 percent quarter over quarter and nearly 35 percent year over year.

The new rate marks the lowest level reached since 0.76 in 1996, according to TransUnion's quarterly data, released August 16. A decline in rates was expected, but the new numbers show more improvement than any other time since the economy's recovery began in 2009, according to a press release.

"TransUnion believes that the recovering economy is only indirectly impacting delinquency rates," Ezra Becker, vice president of research and consulting, said in the press release. "More important and impactful to the decline in bank card delinquency are that consumers are using credit cards more responsibly; a large number of delinquent accounts have moved to charge-off status; and lenders remain conservative in their underwriting."

The company predicts a continuing decline in delinquency rates for the rest of 2011, following a series of trends that show a slight improvement in the economy. Other recent reports show that the numbers of foreclosures and people living paycheck-to-paycheck are decreasing.

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New government regulations in place for consumers in need of debt relief for credit cards and other unsecured debts.

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