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Consumers Doing Much Better Paying On Time. 17 Year Low.

New data out from TransUnion shows that consumers are doing a great job of bringing their finances back into good shape. For the sixth consecutive quarter, the credit card delinquency rate has dropped.

The number of consumers that were 90 days or more delinquent has now dropped to a 17 year low and credit card debt per borrower is hovering around near record low levels.

The data released today shows that credit card delinquencies are dropping at the fastest rate since the recession began. Year over year the delinquency rate has dropped almost 35%.

“National credit card delinquency rates have fallen to levels not seen since 1994 as consumers continue to tighten their spending,” said Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit. “TransUnion believes that the recovering economy is only indirectly impacting delinquency rates. 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.”

TransUnion forecasts that credit card borrower delinquency rates will continue to drift downward for the remainder of 2011 as the economy continues its slow recovery and financial institutions maintain a conservative approach to underwriting.

“Since the recession began, lenders have been increasingly scrutinizing the borrower’s overall financial situation, e.g. duration of employment, credit and income history — holding consumers to higher standards for loan approval,” added Becker. “Those approved are less likely to default even in the face of continued high unemployment levels.”

“Although there are still seasonal influences underlying credit card repayment patterns, they have been muted by the conservative use of credit by consumers. As the slow economic recovery continues, this trend should carry through the end of the year.”

For consumers this is good news, for debt relief providers it forecasts a possibly continued slowing demand for services.


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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Alex Viecco

    I beleive we should all be optimistic that people are doing a better job at paying on their responsability, but my suspicion is that many people have been cut off on their lines therefore are being forced to adapt.  But once the banks start issuing more credit people will “have to have” the newest things to satisfy their need for being consumers.
    I truly would hope that America can learn but history has taught us that consumers have a tremendous drive to buy things driven by the billions spent on marketing.
    Alex Viecco

    • Steve Rhode

      Yea, it’s cyclical.

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