Credit Card News

Advertising Disclosure is an independent, advertising-supported web site. receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Card Issuers » Credit Card Delinquencies Still Declining as Customers Pay Down Debt

Credit Card Delinquencies Still Declining as Customers Pay Down Debt

Add to Favorites:

Americans are finally getting the message: save more, borrow less, live within your means, and make payments on time.

At least, that’s what recent data from the American Bankers Association seems to reflect. Delinquency rates on bank-issued credit cards are at their lowest rate since 2001, with only 2.93 percent of account 30 days or more overdue. The average delinquency rate over the past 15 years is 3.91 percent, and even in the first quarter of 2012 the rate was above three percent.

The dip in delinquencies may reflect a growing trend of financial responsibility in American households, as people strive to save more and spend less, or at least spend within their means. Using credit cards as an emergency fund might have contributed to growing debt during the recession, but as the economy recovers consumers are better able to keep up with household expenses and make credit card payments on time.

Paying Down Debt and Saving Money

CNN Money reports that James Chessen, chief economist at the American Bankers Association,  said “Consumers are saving more and borrowing less as they work to pay down debt at a faster rate.” Speculating on the motivations behind these numbers, Chessen said that “economic uncertainty has made consumers hesitant to take on new debt, and building a stronger financial base has become a priority.”

This summer, the Federal Reserve Bank of New York reported that credit card delinquencies were at their lowest level since 2008, and that credit inquiries were falling. Balances were lower as well, dropping 22 percent from their highest point, reached in 2008.

Credit Card Debt Down While Other Loans Rise

The news isn’t entirely good, however. Across the board, debt isn’t necessarily down, as customers who make credit card payments a priority are often falling behind on student loans, auto loans, and home improvement loans, says the American Bankers Association.

Since credit card debt tends to be at a higher APR than other types of debt, such as student loans, people may choose to keep current on their credit cards and let other debt build  up. Overall, ABA’s Chessen was not optimistic, saying that, “The lack of broad-based improvement gives us pause about the future. Slow job growth and continued uncertainty means many consumers will face challenges managing their debt going forward.”

For consumers looking to pay down debt faster, avoiding credit altogether might not be the best move. Transferring balances to a zero interest balance transfer credit card can be a good option, allowing customers to pay the same amount to their credit cards each month but have more of the balance go toward principle instead of interest.

Add to Favorites:

Related News:

Use of Credit Cards Grow as Delinquencies Decrease
Use of Credit Cards Grow as Delinquencies Decrease

By Elizabeth Nelson, Posted: July 15, 2013

All signs point to continued economic recovery. Credit card debt is climbing and delinquency rates are dropping, according to the latest Fed and ABA reports. Continue reading
Credit Counseling Foundation Names Seniors “Clients of the Year” for Paying Down Debt
Credit Counseling Foundation Names Seniors Clients of the Year for Paying Down Debt

By Elizabeth Nelson, Posted: October 23, 2012

A Kansas couple who paid off over $120 in credit card debt and were named “Clients of the Year” by the National Foundation for Credit Counseling share their secrets for getting out of debt without filing for bankruptcy. Continue reading
FICO Credit Forecast
FICO Credit Forecast

By Dar Dowling, Posted: October 23, 2013

Consumers may be ready to take on more credit in the coming months, according to the latest quarterly report by FICO. With income and spending edging upward, and the recession recovery slow and steady, 46% of bank risk professionals who ... Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Unlimited 1.5x rewards on every purchase, every day. For every $1 you spend, you earn 1.5x Miles.
For Excellent, Good Credit
Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.
For Excellent, Good Credit
Guaranteed $500 Unsecured Credit Limit
For Bad Credit