Despite the positive news in other sectors like housing and consumer confidence, or maybe because of the positive news, credit cards companies are seeing people use lines of credit more.
The national credit card delinquency rate, the ratio of borrowers who are more than 90 days past due, increased slightly to 0.75 percent in the third quarter from 0.71 percent in the same quarter last year, according to a report by TransUnion, one of the big three consumer credit agencies. In the second quarter, the rate was a seasonal low of 0.63 percent.
Average credit card debt per borrower also increased on a yearly basis by 4.91 percent, rising to $4,996 in the third quarter from $4,762 in the same quarter last year, according to the report. On a quarterly basis, average credit card debt was up 0.5 percent relative to second quarter.
Still, the modest uptick isn’t a cause for worry, according to Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit.
“Credit card delinquencies are following a pattern similar to what we observed in 2011, with declines in the first two quarters of the year followed by an increase in the third,” Becker said in a statement. “That seasonal consistency is encouraging. Credit card debt trends in 2012 also are mirroring 2011, with a decrease in the first quarter followed by two increases over the next six months. With both delinquencies and debt levels remaining quite low relative to historical norms, we are confident in the continued stability of credit card usage patterns in the short term.”
While the majority of states saw an increase in consumer credit card debt, some states saw no change and a few even saw decrease, including recession-weary California and Nevada.
TransUnion forecasts credit card delinquencies to remain at the same levels with potentially some see some ups and downs due to the seasonal shopping through the end of 2012 based on current economic conditions.