Credit card delinquency rate declines

Average debt per borrower falls in first quarter

By George C. Ford, The Gazette

Americans are continuing to pay down their credit card debt, according to a new report from Chicago-based TransUnion, which monitors credit related to mortgages, credit cards and auto loans.

The credit card delinquency rate — the ratio of borrowers 90 days or more delinquent on their credit cards — dropped from 1.51 percent in the first quarter of 2013 to 1.37 percent in the first quarter of this year. Average credit card debt per borrower also declined from $5,201 in the first three months of 2013 to $5,164 in the same period this year.

On a quarterly basis, both the credit card delinquency rate (down from 1.48 percent in the fourth quarter of 2013) and credit card debt (down from $5,325 in the same period) decreased due to improved payment patterns after the holiday season.

“We generally see lower credit card delinquency rates and balances in the first quarter of the year as many consumers pay down credit cards that they charged up during the holiday season,” said Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit. “Some consumers who receive tax refunds near the end of the first quarter also use these funds to help pay off debts, including their credit cards.”

TransUnion also reported 344.53 million credit card accounts as of the first quarter of this year, up from 329.73 million in the same period of 2013.

“We see some positive signs in the market with more credit cards being issued although the sector as a whole is growing at a small rate,” said Toni Guitart, director of research and consulting in TransUnion’s financial services business unit. “It is also encouraging that delinquency levels have dropped on a year-over-year basis.”

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