Credit Card News: Your Money

Selected cards: 0
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

  • 21 Nov

    If you’re trying to plan for your financial future, you are probably trying to balance a few different priorities. Putting money aside for retirement, managing any investments you may have, and paying off debt are just a few of the...

  • 20 Jul

    A new report has good news and bad news about savings in America. The good news is that the percentage of people without an emergency savings fund is at a six-year low, down to 24% from 28% last year. The bad news is that nearly a quarter...

  • 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...

looking for a Credit CARD:
Credit One Bank®: Credit One Bank® Platinum Visa® with Cash Back Rewards
Apply Online
Enjoy peace of mind with $0 Fraud Liability
Genesis FS Card Services: 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
$500 Credit Limit. No Credit Check.
Credit One Bank®: Credit One Bank® Platinum Visa® for Rebuilding Credit
Apply Online
See if you Pre-Qualify without harming your credit score
Want to Read News From Other Categories?
Your Money
Card Issuers
  • 31 Jan

    American Express cardholders going through New York’s JFK airport are in for a treat in 2019. The credit card giant has announced that they will open the largest-yet location of their Centurion Lounge series of luxury airport lounges at JFK’s Terminal 4. This is...

Customer Questions

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