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Pay Down Credit Card Debts
Consumers got more serious about paying down their credit card debt this summer, a time when delinquencies usually go up. Cardholders making late payments on bank-issued cards like those bearing MasterCard and Visa logos fell to 1.1 percent for the July-to-September period, down from 1.17 percent in the prior three months, according to credit reporting agency TransUnion.
The decline is significant because of its timing. Delinquency rates usually rise in the third quarter as people spend on vacations and back-to-school shopping, said Trans- Union spokesman Clifton O'Neal.
The latest quarter marks the first time in a decade the delinquency rate dropped in the third quarter from the preceding quarter, according to the TransUnion analysis.
Delinquency rates typically seesaw between quarters. That means the rate typically rises in the first and third quarters, and falls in the second and fourth quarters.
The usual rise in delinquency rates might not happen this first quarter either, however, O'Neal said. "Credit cards are a main source of liquidity for people, and we're seeing that they're trying to maintain a good relationship with their banks."
Delinquencies, which are payments at least 90 days past due, are an indicator that cardholders will default.
The third-quarter delinquency rate was basically flat with the third quarter of last year, when 1.09 percent of card payments were 90 days or more late. A payment that is three months past due is an indicator of a coming default, since it is difficult to make up that many missed payments.
TransUnion figures showed the average balance on outstanding bank cards fell to $5,612 from the previous quarter's $5,719, and from $5,710 a year ago.
Ahorre December 4, 2009 08:09 AM | Deudas