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Debt Relief Providers Still Crying From Low Delinquencies

According to the credit reporting agency TransUnion, credit card delinquency has hit a seven year low. That’s good for consumer but not so good for credit counseling, debt settlement, or bankruptcy providers.

The national credit card delinquency rate declined to its lowest level in at least seven years, dropping from 1.27% in Q2 2013 to 1.16% in Q2 2014. The latest TransUnion Industry Insights Report found that the credit card delinquency rate (the ratio of borrowers 90 days or more delinquent on their general purpose credit cards) dropped nearly 9% in the last year while falling more than 15% in the last quarter (from 1.37% in Q1 2014).

Average credit card debt per borrower remained almost unchanged in the last year, increasing slightly from $5,226 in Q2 2013 to $5,234 in Q2 2014. On a quarterly basis, credit card debt increased from $5,164 in Q1 2014.

The data provided are gathered from TransUnion’s proprietary Industry Insights Report, a quarterly overview summarizing data, trends and perspectives on the U.S. consumer lending industry. The report is based on anonymized credit data from virtually every credit-active consumer in the United States.”

“Consumers continue to have a good handle on their credit cards, with delinquencies at all-time lows across the spectrum,” said Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit. “We observed that delinquency rates are dropping for all age groups, and at relatively similar rates.”

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TransUnion’s latest credit card report also found that the non-prime population (those consumers with a VantageScore® 2.0 credit score lower than 700) represents a larger portion of all new credit card loans at 31.2% in Q1 2014, up from 27.3% in the same period last year. In Q1 2007, the non-prime population represented 40.1% of all credit card originations for that quarter.

“Credit cards continue to perform well even with a higher percentage of non-prime consumers entering the market,” said Toni Guitart, director of research and consulting in TransUnion’s financial services business unit. “We also noted an increase in credit card limits, which points to lenders feeling they can take on more risk while giving consumers a bigger credit cushion.”

READ  Credit Card Delinquencies Fall by End of 2011


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About the author

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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