Credit card defaults fell in June
The number of consumers who saw their credit card accounts charged off in June fell once again on both a month-by-month and year-over-year basis.
The total number of credit card accounts that were defaulted on by consumers in June fell to 5.69 percent of all balances, according to the latest monthly study by S&P Indices and the credit monitoring bureau Experian. That was down from the 5.93 percent observed in May and a considerable drop from the 8.81 percent seen in June 2010.
“Default rates are continuing to decline across major consumer credit categories,” said David Blitzer, managing director and chairman of the Index Committee for S&P Indices. “More importantly for the economy, the Federal Reserve reported that revolving credit – which includes bank cards – rose in May for the first time since 2008. Combined with the improving default experience we are seeing this is a positive sign for an economy suffering from a lack of consumer spending.”
However, some warn that upticks in the amount of credit card debt carried by consumers are the result of prices for necessities such as food and gas increasing significantly without wages doing the same.