Moody’s is reporting that credit card delinquencies dropped again in July, making it the ninth-consecutive month that rates have fallen. At 4.93 percent, this also breaks 20 straight months of delinquency rates above 5 percent, according to the Associated Press.
In the second quarter, rates fell to the lowest in eight years. The serious delinquency rate dropped to 0.92 percent, down 17.1 percent from this time one year ago, TransUnion reports. Year over year, credit card delinquencies decreased by 21.3 percent.
“It appears that consumers have come to realize that material improvement in unemployment is unlikely in the short term, and now is the time to balance saving versus spending,” said TransUnion representative, Ezra Becker. “It remains to be seen whether this dynamic will be short-term or a new paradigm for consumer behavior.”
Average credit card borrower debt across the country also dropped for a fifth-consecutive quarter to $4,951 from $5,165 in the previous quarter. This is a 13.3 percent decrease from the second quarter of 2010.
Analysts expect the trend to continue as household debt decreases and Americans shift their focus toward rebuilding their savings.