Average Credit Card Debt Up, But Late-Pay Rate Slips: TransUnion

The average credit card debt per U.S. consumer increased over the past year, moving from $4,699 in the second quarter of 2011 to $4,971 in the second quarter of this year, according to according to the credit-reporting bureau TransUnion.
However, plastic debt continues to remain relatively low historically, more than $700 lower than just three years ago when it registered $5,719 per consumer during the second quarter of 2009 in the wake of the financial crisis.
The U.S. credit card delinquency rate, which measures the ratio of borrowers 90 or more days past due, dropped to 0.63 percent in the second quarter of 2012, compared to 0.73 percent the previous quarter,
The delinquency rate is at its lowest since hitting 0.60 percent one year ago. Before that, the credit card late-pay rate didn’t reach that level since the fourth quarter of 1994 (0.61 percent).
This information is reported by TransUnion and is part of its ongoing series of quarterly analyses of credit-active U.S. consumers, evaluating how they are managing credit related to mortgages, credit cards and auto loans.
“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.
Total card originations in the second quarter of 2012 rose by 4 percent, compared to a year ago.
The share of non-prime, higher-risk consumers, those with a VantageScore credit score lower than 700 on a scale of 501-990, was 26.1 percent. That’s slightly lower than a year ago (27.0 percent), but still much higher than the 20.6 percent seend in the second quarter of 2010.
TransUnion’s Becker said that non-prime borrowers continue to gain more access to credit, giving greater significance to the historically low delinquency rate
“This is important to note, because one would think delinquencies would rise as non-prime borrowers gain more access to credit. We’ve found that consumers continue to value their credit cards more than ever and will likely do so at least until unemployment abates.”

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