After Falling to Record Low, Default Rates Rise Again - Other News

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Credit Card Applications » News » Other » After Falling to Record Low, Default Rates Rise Again

After Falling to Record Low, Default Rates Rise Again

After Falling to Record Low, Default Rates Rise Again
January
16
The content is accurate at the time of publication and is subject to change.

Consumer credit default rates are on the rise again, according to the S&P/Experian Consumer Credit Default Indices released yesterday.

The survey, which looks at data from five cities – Miami, Chicago, Los Angeles, New York City, and Dallas – showed increases in default rates ranging from one point (Dallas) to 41 points (Miami). However, rates in all five cities were still below their December 2011 levels.

September 2012 had the lowest default rates since the recession, with a national composite rate of 1.46%. Since then, that number has risen steadily – to 1.55% in October, 1.64% in November, and most recently, 1.72% last month.

Mortgage default rates followed the trend – after a post-recession record low in September, the number of defaults rose each month through December. Second mortgage default rates were up as well. Other element of the indices includes auto loan defaults, which were flat, and bank card defaults, which were actually down. They hit a low of 3.53% in December. Bank card defaults were 3.58% in November.

“Fourth quarter default rates reversed some of the recent declines and pushed the composite default rate above its level of last May,” according to the chairman of the S&P Dow Jones Indices Index Committee, David Blitzer. Mortgages – both first and second – were the main culprit, he said.

S&P/Experian Consumer Credit Default Indices
Index December 2012
Index Level
November 2012
Index Level
December 2011
Index Level
Composite 1.72 1.64 2.24
First Mortgage 1.68 1.58 2.19
Second Mortgage 0.69 0.62 1.33
Bank Card 3.53 3.58 4.60
Auto Loans 1.09 1.09 1.27

The S&P/Experian Consumer Default Composite Indices for the five metropolitan service areas for the last quarter of the year:

The S&P/Experian Consumer Default Composite Indices
Metropolitan
Statistical Area
December 2012
Index Level
November 2012
Index Level
December 2011
Index Level
New York 1.51 1.47 2.13
Chicago 2.12 1.85 2.84
Dallas 1.26 1.25 1.56
Los Angeles 1.84 1.60 2.54
Miami 3.07 2.66 4.73

Source: S&P/Experian Consumer Credit Default Indices
Data through December 2012

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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