Credit card delinquencies down again in July, showing strength in subprime borrowing

By , CardRatings contributor
  • Google +
  • Twitter
  • Facebook

Americans keep getting better at paying their credit card bills on time, according to the results of a new Experian study. Researchers reported that the dollar amount of bank credit card accounts over sixty days delinquent fell 21 percent in July 2012 from the same period a year earlier. Auto loan and mortgage delinquencies also dropped significantly over the past year, researchers said.

Equifax Chief Economist Amy Crews Cutts told reporters that consumers have been making monthly payments on time, while qualifying for home refinancing deals in larger numbers during the survey period. Equifax's figures also suggest that more Americans have been paying more than the required minimum monthly payments on their credit cards, resting more of their available credit.

Experian's numbers mirror similar reports from credit reporting agency TransUnion and credit card issuer Capital One. TransUnion's Ezra Becker called the current credit card delinquency rate the lowest in 18 years, despite measuring a modest increase in the average credit card debt per borrower between 2011 and 2012 (today's estimate: $4,971).

Capital One grows subprime market without raising delinquency rate

Meanwhile, Capital One's stock continues to climb as company executives told the Securities and Exchange Commission about reduced charge-offs and delinquencies among its customers. Just 3.09 percent of Capital One cardholders fell more than 30 days behind on their payments in July, down from June's 3.16 percent figure. Domestic charge-offs fell to just 2.62 percent, while Capital One's international charge-offs fell below 5 percent.

At a time when other lenders have been reluctant to issue credit cards for fair credit, Capital One shored up its position in the marketplace. Its acquisition of online savings bank ING DIRECT gives the Virginia company enough capital to purchase the Orchard Bank and Household Bank credit card businesses from rival HSBC. TransUnion's Becker remarked that the non-prime market had increased while delinquencies fell, since "consumers value their credit cards more than ever."

0 Responses to "Credit card delinquencies down again in July, showing strength in subprime borrowing"

No Comments

Leave a Comment
About Our Ratings ×

Our editors rate credit cards objectively based on the features the credit card offers consumers, the fees and interest rates, and how a credit card compares with other cards in its category. Ratings vary by category, and the same card may receive a certain number of stars in one category and a higher or lower number in another.

The ratings are the expert opinion of our editors, and not influenced by any remuneration this site may receive from card issuers.

Advertisers in our database are highlighted, and advertisements include an option to apply using links on our site. CardRatings.com may be compensated by companies mentioned on the site when a user's application is accepted or approved by such companies.

How do your cards stack up?

Compare your card starting here


Featured Partner Cards