Credit Card Late Payments Lowest Since 1994
Advertising Disclosure
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com 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. Credit-Land.com has not reviewed all available credit card offers in the marketplace.
Credit Card Applications » Research » Guides » Cardholder Benefits » Credit Card Late Payments Lowest Since 1994

Credit Card Late Payments Lowest Since 1994

By
Add to Favorites:

The data shows it! Credit card consumers are doing better at maintaining their account balances. Consumers are becoming more responsible for their finances and are actually making a difference in their pockets. In fact, the consumers are so diligently taking care of their credit card concerns that late payments have dipped to the lowest level in 17 years. According to TransUnion, a credit card reporting agency, the national credit card delinquency rate or payments that are 90 days or more past due have fell .60 percent in the second quarter. This number is down .92 percent from a year ago, and is the lowest since 1994.

That’s great news for the consumer and the consumers’ money.

Finance analysts expected consumer delinquencies to drop due to better consumer money management and better spending habits, but an improvement of this magnitude is far better than analysts’ predictions. "Not only do we have consumers that are using their debt more responsible and taking out less debt, they've also cut back on the number of the cards they carry," said Chet Wiermanski, global chief scientist for TransUnion's financial services business said.

Ironically, TransUnion’s report found that more consumers were choosing to use their credit cards over debit cards and cash. But in spite of increased credit cards usage, delinquency payments still decreased. This shows that consumers are actually making conscious decisions in regards to budgeting, credit cards and spending habits. According to the report, the average combined total debt for all major credit cards increased approximately $20 from the first three months of the year to $4,699 per consumer. That’s a massive leap. Surprisingly, that number is about five percent lower than it was in the second quarter of 2010, which clocked in at a debt level of $4,951, and 16 percent lower than the average debt in the first quarter of 2009, where the debt reached $5,575.

Several other factors have contributed to the declining delinquency rate. Banks have become stricter when it comes to approving credit card applications. And because of this consumers with low credit scores are feeling the pang of denial more so now than ever. Consumers with bad credit have to rely more on debit and cash resources. Banks have also reduced credit limits on existing cards, which makes it harder for consumers to run up large balances which they can not afford to pay off. Also the increased use of debit cards shows that consumers are more concerned with spending the money they do have, rather than borrowing. The thought process behind using credit cards is changing everyday, as long as consumers learn to live with debt and not let it overtake them, then debt management should progress.

Based on the data, analysts predict that consumers will continue to monitor their money and the delinquency rate will continue to decline for the remainder of the year. "It's hard to forecast where this is going when you've reached a historical low," Wiermanski said. "Because you're in uncharted waters."

Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Credit Card Tips For Holiday Shopping 2016

By Herbert Moore, Posted: November 23, 2016

November and December are the busiest months as gift shopping reaches its peak. People rush around looking for the best gifts and the best deals leaving a lot of money in the shops. Holiday season may force you to go over the household ... Continue reading

Credit Cards to Save More on Holiday Shopping

By Herbert Moore, Posted: November 22, 2016

Discounts and special offers are available all year round. Werther you are a bargain hunter or an impulse buyer, make sure you check online discounts and special offers. Also, if you are a cardholder, see if your credit card opens the door ... Continue reading

How to Get Free Wi-Fi in the Air

By Herbert Moore, Posted: September 28, 2016

Sometimes in-flight Wi-Fi is the bare necessity when you travel abroad or within the country. However not all airlines offer free in-flight Wi-Fi. There is only a couple of airlines that will allow you to use Wi-Fi ... Continue reading