Fewer credit card debt accounts in delinquency
According to the firm, credit card debt came out to an average of $5,612 during the quarter, which is decrease of 1.87 percent nationally when compared to the second quarter. When compared to the third quarter of 2008, average credit card debt was down 1.71 percent.
Furthermore, delinquencies also saw a drop during the quarter. Accounts that are more than 90 days late in payment fell by 5.98 percent from the second quarter. This year’s third quarter delinquencies are comparable to the same time period in 2008, when such accounts came in at 1.09 percent.
The decrease in delinquency rates seen in the third quarter marks the first time in 10 years the number of late accounts dropped in comparison to the second quarter.
“While TransUnion still expects to see seasonal behavior patterns in delinquency rates, the industry is still in flux as to what the new historical norms might be,” Ezra Becker, director of consulting and strategy in the firm’s financial services group, said.
Further changes in delinquency rates may be seen due to new regulations put forward by the federal government. The Credit Card Accountability, Responsibility and Disclosure Act will make it more difficult for lenders to arbitrarily raise rates on credit card debt.