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Credit card habits improve

By Janna Herron ·
Tuesday, August 16, 2011
Posted: 12 pm ET

Reports from several corners show that Americans are handling their debt better than the U.S. government.

First up, a study from TransUnion on Tuesday shows the percentage of borrowers who are at least 90 days late on their credit card payments shrank to 0.6 percent in the second quarter. Not only is that the sixth straight quarterly decline, it's the lowest point in 17 years. The drop also was the largest improvement since the recovery began two years ago.

That's not all.

On Monday, half of the top six credit card issuers posted lower default rates last month versus June. And four of them reported lower delinquency rates.

All this comes as a consumers start to heat up their credit card use after taking years off to pay down household debt.

Credit card limits rose by $60 billion, or 2 percent, in the second quarter, according to the Federal Reserve Bank of New York's household debt study for April, May and June, released Monday. That marks the second quarterly increase in a row.

Consumers also opened 10 million more credit card accounts in the second quarter for a total of 389 million. But they are keeping cool heads about spending. Balances remained almost 10 percent below their peak in 2008.

The New York Fed noted that the findings, drawn from credit report data supplied by Equifax, shows "continued signs of healing" along with "a modest increase in the willingness of consumers to borrow and banks to lend."

That sounds better than what has come out of Washington recently.

How are you handling your credit cards? Are you willing to put more on them?

Follow me on Twitter: @JannaHerron

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Georgie Kunkel
September 30, 2011 at 12:54 pm

I only a use credit card in case of emergency.

I can't save any more than I have saved all my life. No buying expensive lattes, no professional hairdos, no professionally done fingernails, no extended cable, no spa visits, no retail clothing shopping,no drinking, no smoking, no extended travel vacations, rarely eating out,no buying greeting cards as I make my own,no extended car trips, never any credit card debt and my health plan pays for my YMCA membership--need I say more?

And I have an active exciting life. The secret is--not to get sucked into overspending and learning to create you own interesting life without the corporation gaining so much profit from you.

Janna Herron
August 17, 2011 at 9:15 am

@Debra: The first question is to find out how often you are using your credit card and how you are making your payments (either paying off the entire balance or making minimum payments). For those who are using their credit cards, are you charging more than before and, if so, why?

Debra James
August 16, 2011 at 8:43 pm

What do you meany by your two questions in the last sentence? They aren't very clear. Are you asking if people are willing to use their credit cards more, AND leave larger balances unpaid on the cards? Or, are you asking if people are staying current on their monthly minimum payment on the card?