Credit Card Debt & Delinquencies Fall in First Quarter of 2013
Americans are doing a better job of paying off their credit card debt, and they are doing so in a timely manner.
According to the latest report from TransUnion, the average credit card debt per borrower fell 1.7 percent to $4,878 in the first quarter of 2013, down from $4,962 a year ago. It declined 4.8 percent from the $5,122 in fourth quarter of 2012 when consumers charged their holiday shopping.
The credit card delinquency rate–defined as payments at least 90 days overdue–dropped to 0.69 percent in the first quarter of 2013 compared to 0.73 percent a year ago. In addition, this rate represented a 18.8 percent seasonal decline from the 0.85 percent posted during the fourth quarter of 2012.
The study also showed a decline in new credit card accounts. The latest data from the fourth quarter of 2012 found new credit card originations dropped 1.6 percent from the year before, from 7.695 million new accounts to 7.570 million.
“We traditionally see credit card delinquencies and balances decline during the first three months of the year as many people pay down their holiday shopping balances or use their tax refunds to pay off their debts,” said Ezra Becker of TransUnion. “The year-over year improvement in credit card delinquencies is indicative of how consumers continue to value their credit card relationships.”
The report found the four states with the highest credit card delinquency rates were all from the South: Mississippi, Alabama, Arkansas and Georgia. The lowest delinquency rates were South Dakota, North Dakota, Montana and Minnesota.
Alaska had the highest credit card debt per borrower, averaging $6,789, while Iowa had the lowest at $3,810.