An increase in holiday spending drove up late credit card payments during the fourth quarter of 2012.
The credit card delinquency rate, which represents the percentage of credit card customers that are at least 90 days overdue on their payments, increased to 0.85 percent in the fourth quarter from 0.78 a year earlier, according to new numbers from credit agency TransUnion. That translates to a 9 percent increase in late payments from the year before.
The delinquency rate during these last three months of 2012 was also a 13 percent increase from the third quarter of the year, when the rate was 0.75 percent.
TransUnion predicts that if the economy continues at its current pace, credit card delinquency rate will drop slightly to 0.81 percent in the first three months of this year. This doesn't factor in the possible impact of higher payroll taxes or delayed tax refunds. If consumers have less income or delayed tax refunds, they have less money to pay down credit card debt and credit card delinquency could increase.
While late payments increased, the average amount of debt charged by borrowers declined. Average credit card debt per borrower was $5,122, dropping 1.6 percent from the fourth quarter of 2011. However, this was up 2.5 percent from the third quarter of 2012.