More than 8 million consumers cease credit card use
Americans stuck to their debt reduction habits in the third quarter of 2010, as consumers continued to avoid credit cards and cut delinquency rates.
Credit card delinquencies, defined as payments more than three months late, decreased to 0.83 percent during this time – down nearly 10 percent over the previous quarter. Year over year, late reimbursements fell by 24.6 percent.
The study, conducted by TransUnion, found that of the 70 million consumers who do not have an active credit card, 8 million stopped using credit during the latest economic quarter. The agency says the decline in usage was due to charge-offs, more conservative spending and significant steps by individuals to maintain good relationships with lenders.
“The vast majority of the consumers who do not possess or have stopped using credit cards continue to have and use other forms of revolving and installment credit, and of course still need to pay for necessities,” Ezra Becker, vice president of research and consulting at TransUnion, said on Monday.
In addition, the quarterly report found high-income consumers were just as likely as those in lower brackets to report suspensions in credit usage.