Credit card delinquencies and debt inched up in the third quarter, TransUnion reported this week.
The credit reporting agency said Monday that the percentage of borrowers at least 90 days past due on their credit card payments increased to 0.75 percent from 0.71 percent in the same July-September period last year. The average credit card debt rose by 4.9 percent in the third quarter to $4,996 per borrower, up from $4,762 during the same part of 2011.
The report suggests that consumers are having a tougher time paying their bills. But historically those figures are still very low. The average delinquency rate for every third quarter from 2000 to 2011 is 1.25 percent, or twice this quarter's average, says Ezra Becker, vice president of research and consulting at TransUnion. The average debt during that same time is $5,258, higher than this year.
"People make the mistake in thinking that any delinquency is bad, but that's not the case. There will always be delinquencies," Becker says. "The only way to reduce the delinquency rate to zero is for lenders to stop lending."
In fact, lenders are issuing more credit cards to consumers with less-than-the-best, or "nonprime," credit scores. The good news, says Becker, is that the delinquency rate remains low even though more risky consumers are using credit cards.
"These consumers are really taking their credit cards seriously and managing them well," he said.
What's your take on these new stats?
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