The Bank Credit Default rate Dropped Last Month - Other News

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most 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 » News » Other » The Bank Credit Default rate Dropped Last Month

The Bank Credit Default rate Dropped Last Month

The Bank Credit Default rate Dropped Last Month
Tags: , ...
October
26
The content is accurate at the time of publication and is subject to change.

The SP Experian Consumer Credit Default Indices for September 2018 are out, showing that default rates dropped in three areas – credit cards, auto loans, and mortgages. The composite rate dropped five basis points when compared to August, with the bank card default rate falling 38 basis points to 3.14%. The auto loan default rate went down eight basis points to 0.89%, and first mortgage defaults fell two basis points, hitting 0.63%.

All in all the data suggests that consumers are in good shape when it comes to managing their debt and finances. That said the strides in bank card defaults stand out because they have not been this low since December 2016, and the drop of 38 basis points makes it the biggest monthly downturn since December 2015. September’s drop in bank card default rates is also part of a five-month trend.

Five major cities clock in with lower default rates

The five Metropolitan Statistical Areas (MSAs) also showed decreases in their default rates in all three areas. With Dallas weighing in with the biggest downturn, falling 11 basis points to 0.73%. The default rate for Los Angeles fell to 0.56%, down nine basis points, while the rate for Chicago fell six basis points hitting 0.85%.

What about New York? The default rate fell four basis points, while Miami dropped a single basis point.

There are a few factors playing a role in the lower default rates. “With the low unemployment rate and some improvement on wage gains, consumers are not facing rising economic pressure. The favorable income situation combined with auto and home sales that have drifted down since late 2017 led to the current good consumer credit default pattern. Soft retail sales growth contributed to improvements in the bank card default picture,” said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices.

Will hurricane season affect default rates?

Hurricanes have been in full swing this season with 14 hurricanes being names, and the season is not over until after Thanksgiving. They suggest that these weather patterns may have some effect on future default rates, depending upon where the storms hit and their severity.

“The short-term impact of the hurricanes is an anticipated reduction in retail sales in impacted areas. However, this is likely to be followed by rising retail sales and spending combined with weaker consumer financial conditions for consumers in affected regions. Depending on the extent and severity of the storm damage, consumer credit default rates in some regions could rise during the rest of 2018,” added Blitzer.

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.
Add to Favorites:

Related News:

Switching Credit Cards Is Popular and Discover Scores Best in Customer Satisfaction
Switching Credit Cards Is Popular and Discover Scores Best in Customer Satisfaction

Posted: August 27, 2018

Consumers are very interested in maximizing rewards and willing to switch credit cards to get the best rewards and benefits, according to the new J.D. Power 2018 Credit Card Satisfaction Study. Yet they also found out that some consumers… Continue reading

Citi Cardholders Can Score Tickets to See P!NK, Muse and Chris Stapleton
Citi Cardholders Can Score Tickets to See P!NK, Muse and Chris Stapleton

Posted: January 24, 2019

If you have a Citi credit card you can check out a new concert series featuring P!NK, Muse and Chris Stapleton being rolled out by Citi Sound Vault, a live music experience just for Citi cardholders. The concert series will take place… Continue reading

Experian Credit Score Boost
Experian Credit Score Boost

Posted: December 20, 2018

If you have ever wanted to boost your credit score, you may want to take a closer look at Experian Boost, a new online platform that lets people increase their credit score almost instantly. Experian Boost is free and expected to be… Continue reading

Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
The Citi Rewards+℠ Card - the only credit card that automatically rounds up to the nearest 10 points on every purchase - with no cap.
For Excellent, Good Credit
Earn unlimited 1.5% cash rewards on all purchases.
For Good, Excellent Credit
See Rates & Fees
Perfect credit not required for approval; we may approve you when others won’t
For Fair/Bad Credit
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!