Credit Card News: Your Money

Selected cards: 0
Compare
Advertising Disclosure
Credit Card Delinquencies Dip as Balances Rise
7 Nov
Consumers are being more disciplined in their use of credit, which means delinquencies are down even as balances increase, according to a recent Equifax report. The National Consumer Credit Trends looked at data for auto loans, retail and bank credit cards, mortgages and student loan debt.

From August 2012 to August 2013, auto, bank and retail credit card balances all increased, and those higher balances went hand-in-hand with lower delinquency rates. Retail credit card balances have been growing for 24 consecutive months, while total auto loans are at a five-year high.

Equifax chief economist Amy Crews Cutts says the data “indicates that the American consumer is being very disciplined in their use of credit. It's like they've gone on a debt diet and they are really sticking to it, with modest increases in line with capacity to repay."

Total consumer debt is down 15% from its highest level, and default rates have returned to their pre-recession numbers, excluding student loans. Mortgages and student loans continue to have high delinquency rates in the wake of the economic crisis. “Hopefully we will see those improve more quickly in coming months," said Cutts.

Auto loan data shows a total of more than 61 million loans outstanding in August 2013, the highest in 57 months. Bank-issued credit card loans stand at $93.3 billion, a five-year high. Retail credit cards are at $34.2 billion, with 18 million new loans originating between January and June of this year. Home loans are broken down between first mortgages and home equity lines of credit, with first-time borrower loans at $7.7 trillion and home equity loans at $136.7 billion.

Loans to subprime borrowers are up in the retail credit card category, indicating lenders more willing to take risks on those with limited credit. Equifax defines subprime borrowers as those with a score lower than 660.

More credit being issued to high-risk borrowers is widely regarded as a sign of an improving economy. Increasing balances combined with falling delinquency rates is also an indicator of better economic times, because it means borrowers are confident about taking out more loans and are able to keep up with the payments on those loans.

Read Also Related News

  • 28 Feb

    It’s an oft-quoted statistic that about half of all marriages end in divorce. But less talked about is the reason why many of these marriages fail. A new survey by credit bureau Experian sheds some light on the subject and reveals that...

  • 7 Dec

    Despite highly-publicized hacks that left people’s credit card information vulnerable to criminal use and fraudulent purchases, people still find credit cards to be the safest way to pay for purchases, online or off. Payment services...

  • 3 Sep

    If you’re looking to transfer a balance on your credit card, you might be interested to know that the Citi Simplicity card has just won an award for best balance transfer credit card. Factors that put it over the top for its...

looking for a Credit CARD:
Credit One Bank®: Credit One Bank® Platinum Credit Card with Rewards
Apply Online
Receive 1% cash back on eligible purchases, terms apply
Mid America Bank & Trust Company: Milestone® MasterCard® with Free Choice of Card Image
Apply Online
Applying is quick and easy with our fast decision process
Horizon Card Services: Horizon Gold Credit Card
Apply Online
Guaranteed $500 Unsecured Credit Limit
Credit One Bank®: Credit One Bank® Platinum Visa®
Apply Online
See if you Pre-Qualify without harming your credit score
Want to Read News From Other Categories?
Your Money
Card Issuers
Travel
Security
Shopping
Technology
  • 20 Jun

    Discover cardholders will be able to contact customer service more easily with the advent of in-app messaging, which allows customers to communicate with Discover customer service agents without having to stop and restart their interactions when they are logged into or...

Customer Questions

  • About Us
  • Contact Us
  • Privacy Policy
  • Terms of Use
  • 0 Selected Cards Compare