There was a slight increase in credit card delinquency rates this year compared to last, but the numbers are still relatively low and expected to stay there, according to credit bureau TransUnion. Projections call for the number of people who are more than 90 days late paying their credit card bills to stay below a rate of 0.90% in 2013.
In the second quarter of 2011, the credit card delinquency rate reached its lowest point since 1994. The fourth quarter of 2011 had a 0.78% delinquency rate. In 2012 the rate was 0.83%. TransUnion predicts that rate will go up just slightly to 0.87% next year.
State by state
Overall, Mississippi, West Virginia and Arkansas are expected to have the highest rates of credit card delinquency in 2013. North Dakota, Montana and Minnesota are projected to have the lowest rates.
Only six states are expected to experience declines in the delinquency rates, including Rhode Island, Montana, and Georgia. States projected to have the biggest increases in delinquencies are Ohio, Missouri, and North Dakota.
More debt, less delinquency
A lower credit card delinquency rate does not necessarily translate to increased fiscal health of consumers. With unemployment still a pressing issue, many people are relying on credit cards to pay for basic needs like food and utilities.
That translates to more new credit cards. “Credit card originations have been increasing in the last few years, and with that increase we have seen non-prime borrowers receive not only more credit cards, but also comprise a larger share of new credit cards,” said Steve Chaouki, group vice president in TransUnion’s financial services business unit.
Forecasts are subject to change depending on changes in economic factors like unemployment and real estate prices.