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Credit Card Applications » News » Legal » Credit Default Rates Down

Credit Default Rates Down

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Credit Default Rates Down
April
18

Consumer credit default rates fell in March and the retail sector showed some gains, according to the S&P/Experian Consumer Credit Default Indices.

“Along with signs that the economy is improving, consumer credit default rates continue to gradually decline,” said David Blitzer, managing director for the S&P Dow Jones Indices.

Bank cards and auto loans hit historic default lows. Overall default rates are now in line with pre-recession rates. The bank card default rate in March was 2.73%, down from last year when it was 3.51%. Auto loan default rates are currently at less than 1%. First mortgage rates had a default rate of 1.13%, second mortgages defaulted only .60%.

Consumer confidence is up

Lower default rates combined with other positive factors including fewer people filing for unemployment benefits and increased economic levels, suggest that consumer spending may continue to increase.

The survey took a close look at the numbers from New York, Los Angeles, Miami, Dallas and Chicago, all of which showed across-the-board decreases in credit line defaults last month.

The regional picture

Los Angeles had the lowest default rate since July 2006 coming in at 1.04%. Miami showed the biggest decrease in defaults when compared with last year, down 86 points, yet it still has the highest default rate of all the cities they looked at. Dallas has the lowest.

 

City

March 2014
Default rate

March 2013
Default rate

New York

1.37%

1.79%

Chicago

1.52%

1.83%

Dallas

0.97%

1.20%

Los Angeles

1.04%

1.48%

Miami

2.07%

2.93%

 

The S&P/Experian Consumer Credit Default Indices are a join project of S&P Dow Jones and Experian. This report tracks default trends in four areas – bank card, auto, first mortgage lien and second mortgage lien. The consumer loan and payment information used to generate this report is from the Experian’s database, which includes data submitted by 11,500 lenders, and represents $11 trillion in outstanding loans.

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