Default Rate on Bank Credit Cards Lowest Since 2006
The default rate on bank credit cards dropped to its lowest level of the post-recession era in December.
According to the S&P/Experian Consumer Credit Default Indices, the default rate on bank credit cards declined to 3.53 percent, down from 3.58 percent in November.
This was the lowest default rate on bank credit cards since December 2006 when it reached 3.50 percent.
This default rate reached a recent high of 9.15 percent in April 2010 but has subsequently shown fairly steady decreases. The rate in December 2010 was 6.73 percent and 4.60 percent in December 2011.
Overall consumer credit default rates rose for third straight month after hitting a post-recession low in September of 1.36 percent. The overall number increased in December to 1.72 percent from 1.64 percent in November. This increase was mainly due to a rise in the default rate on mortgages which also increased for the third consecutive month, from 1.58 percent in November to 1.68 percent in December.