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Credit Card Data Out. Good News, Bad News for Debt Relief Providers

By on August 14, 2012

TransUnion has release the latest credit card data which has both longer term good news and short term bad news for the debt relief industry.

Let’s get the bad news out of the way, credit card delinquencies are down. That should quiet demand for debt relief services for at least the next year.

The national credit card delinquency rate (the ratio of borrowers 90 or more days past due) dropped to 0.63% in Q2 2012 from 0.73% the previous quarter. The credit card delinquency rate is at its lowest level since reaching 0.60% one year ago in Q2 2011. Prior to that, the last time the credit card delinquency rate was below its current level was in Q4 1994 (0.61%).

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. “It’s a positive situation because average borrower balances have increased over the past year as new card originations have grown. These low delinquency rates reflect both continued conservatism in lender underwriting and the ongoing prioritization of card payments among consumers.”

On a longer term view the amount of debt on credit cards for the individual borrower rose slightly. Hey, I’m looking for any silver lining I can find.

Average credit card debt per borrower increased over the past year, moving up from $4,699 in Q2 2011 to $4,971 in Q2 2012. However, credit card debt continues to remain relatively low, more than $700 lower than just three years ago ($5,719 in Q2 2009).

The number of credit cards issued has climbed slightly with non-prime consumers getting access to more cards.

If balances continue to creep up and more sub-prime borrowers get access, once the economy rebounds and credit consumption accelerates there should be an increased demand again for debt relief services.

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About 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.

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