Credit Cards: Americans Paying Bills on Time More Frequently
Congratulations, America — it looks like you’re starting to get the hang of this “payment due date” concept. The number of retail credit card accounts in late-stage delinquency is at a six-year low, according to Fitch Ratings, and charge-offs are down 38% from a little over two years ago. But will this new stability last? Credit card companies are cranking out new offers like mad, and we’re picking up what they’re putting down.
Fitch says that the number of card accounts past due by more than 30 days dropped by about half a percentage point in only a month. Issuer Capital One also reported a small month-over-month drop in delinquencies for April.
New data from credit bureau Experian found that the rate of 30-day-plus delinquencies dropped from 5.3% to 3.8% over the course of a year. Credit bureau TransUnion issued similar findings: The number of accounts with payments overdue by 90 days or more declined slightly, as did the average amount of credit card debt, which fell by nearly 5% to $4,962 between the final quarter of 2011 and the first quarter of this year.
What’s a little more disturbing is that TransUnion also found that average credit card balances were up by around 6% from the first quarter of last year. (The quarter-over-quarter drop was attributed to people paying off holiday-related purchases.) Compared with a year ago, we’re spending more: Experian says retail and food service spending is up by 8% from a year ago. “Early reports for 2012 see that trend continuing,” a recent Experian white paper noted.