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Card delinquencies decline

By Lucy Lazarony ·
Monday, February 28, 2011
Posted: 10 am ET

Fewer Americans are falling behind on their credit card bills by 90 days or more.

The national credit card delinquency rate decreased to 0.82 percent in the fourth quarter of 2010, a decline of almost 32 percent from 2009, according to quarterly report released by TransUnion, a national credit reporting agency.

"From a delinquency perspective, 2010 was an excellent year for consumers as they showed continuing fiscal responsibility in working to pay down their credit card debt," says Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit. "Even in the presence of falling home prices, the accumulation of negative real estate equity and high levels of unemployment, consumers still have been placing a premium on paying off their credit card obligations and maintaining the health of their card relationships."

But not all the news on credit card delinquency rates was good as 13 states saw an increase in credit card delinquencies in the fourth quarter of 2010 from the previous quarter. The biggest boost in credit card delinquencies occurred in Kansas, where delinquencies rose 7.5 percent, followed by Mississippi with a 6.6 percent increase and Delaware with a 6.2 percent increase.

In contrast, many folks in the District of Columbia and Montana were able to catch up on their credit card bills in the fourth quarter of 2010. In the District of Columbia, credit card delinquencies dropped by 17.8 percent from the previous quarter. And in Montana card delinquencies fell by 16.7 percent from the previous quarter.

The average total credit card debt per borrower was $4,965 in the fourth quarter of 2010, down 8.62 percent from the fourth quarter in 2009, according to TransUnion.

Many Americans opened new credit card accounts in the fourth quarter of 2010 with the number of new card accounts increasing by 19.1 percent from 2009.

"The increases occurred across the board, as all states showed upward movement in new credit card originations since this time last year," according to a press release from TransUnion.

The greatest gains in new card accounts occurred in Kentucky, up 41.1 percent, followed by Nevada with a 34.3 percent increase and Arizona with a 29.8 percent increase.

The fourth quarter of 2010 is the second consecutive quarter that new card originations increased since the recession began in late 2007, according to TransUnion.

Are you on the lookout for a new credit card?  These tips can help you select a card that's right for you.

Are you steering clear of new cards and focusing on paying down credit card debt? These pay-down strategies and tips for boosting card payments will help you topple your card debt.

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