Credit card defaults tumbled considerably in August
The rate at which consumers fell so far behind on their credit card payments that the accounts were written off as uncollectable fell once again in August.
The credit card default rate – the number of accounts 90 days or more behind on payments which are considered uncollectable by lenders – slipped to just 5.26 percent of all balances in the month of August, down from July’s total of 5.64 percent, according to the latest monthly report from S&P Indices and the credit monitoring bureau Experian.
Defaults have been falling significantly in recent months, and the rate in August was well below the 7.87 percent observed at the end of the same month last year, the report said. Meanwhile, defaults across all types of consumer loans have largely fallen as well, with major metropolitan areas across the U.S. experiencing declines or at least remaining flat.
However, there has been a significant amount of increased credit card use across the country in the last few months, and some experts fear that another round of higher default rates could be on the horizon.