Third quarter sees drop in delinquencies on credit card debt
Late payments on credit card accounts saw a dip in the third quarter.
In compiling its data, TransUnion looked at accounts that were delinquent by 90 days or more. Those accounts dropped 1.1 percent during the third quarter. Furthermore, the delinquent accounts decreased 5.98 percent when compared to the second quarter.
Ezra Becker, TransUnion’s financial services group director of consulting and strategy, said the numbers posted represent the first time in 10 years that third quarter delinquencies dropped when compared to the second quarter.
“This movement could have occurred for a number of reasons,” Becker said. “First, the national savings rate fell in the third quarter, possibly indicating continued consumer efforts to keep debt to a minimum and debt repayment under control in the face of an already depressed labor market.”
Another reason why delinquencies may have fallen can be tied to new rules put forward by the Credit Card Accountability, Responsibility and Disclosure Act. Many companies may have adjusted their practices in light of impending regulations, which Becker said affected third-quarter results.
Many of the states that have faced the most hardship tied to the housing market also saw the highest rates of delinquencies on credit cards. Nevada took the top spot for delinquencies at 1.98 percent, while Florida came in second with a rate of 1.47 percent. Rounding out the top-three states was Arizona at 1.35 percent.
According to RealtyTrac, Nevada posted the highest rate of foreclosure activity during the third quarter, with one in every 80 housing units seeing a filing. Florida was the third-highest, while Arizona came fourth.
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