Several recently released studies confirm that consumers are making substantial strides in paying their credit card balances.

A TransUnion study shows the average debt per credit card consumer is now $5,165, down 11% from the $5,776 of year ago and almost 5% from the $5,434 in fourth quarter of 2009.

Equifax data shows the late payments on bank issued credit cards were down 6% in March and 17% from last year.

Finally, Standard & Poor’s Ratings Service showed the number of seriously delinquent credit cards fell in March for the first time since last August. Accounts at least 90 days behind dropped to 3.0% from 3.2% in February.

What could be the reason for these changes?

The National Foundation for Credit Counseling gives some credit for these changes to the CARD Act. One provision that went into effect in February requires issuers to print on every credit card statement the length of time it will take to get out of debt if the consumer only pays the minimum amount due. 25% of the 2,000 respondents in a recent NFCC survey said that disclosure encouraged them to pay more each month. Standard Poor’s data found the percentage of an accountholder’s balance paid in March jumped to 19.5% from 8.2% in February.

Issuers are also seeing the results of these changes. The six major credit card companies released delinquency and default data this week. Every major issuer reported small drops in the delinquency rates from March to April:

March              April
Bank of America  7.07%            6.73%
Citigroup                6.06               5.85
Discover                 5.39               5.20
Capital One            5.30               5.07
Chase                     4.51               4.40
American Express   3.30               3.10

Five of the six issuers reported a drop in the charge-off rate from
March to April; only Bank of America reported an increase:

March            April
Bank of America     12.54%          12.71%
Citigroup                   11.55             11.23
Capital One               10.87              9.68
Chase                          9.51                 9.03
Discover                    8.51                 8.42
American Express 7.50               6.70

These declines, though small, are good news for issuers because defaults represent large losses. According to R.K. Hammer, credit card charge-offs increased 59% in 2009, accounting for $89 billion in losses for banks in the United States. Industry wide, the charge-off rate hit a high of 10.10% in the third quarter of last year according to the Federal Reserve.

“It is encouraging to find multiple sources that show consumers are measurably reducing their credit card debt. Issuers have discontinued some accounts, cut credit limits and tightened lending standards–all of this has contributed to driving down credit card debt and the risk of default,” says Bill Hardekopf, CEO of LowCards.com and author
of The Credit Card Guidebook. “What happens next will be a key to continued recovery. Will consumers continue to pay down debt even during a time of recovery? Have they changed their ways or switched to another form of payment? Will issuers loosen their standards for lending and try to grow their credit card revenue again?”