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Credit card late payments fall to 1996 levels, says TransUnion

By , CardRatings contributor
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Credit card delinquencies dropped to levels unseen since the Clinton Administration, according to a report from credit reporting bureau TransUnion. The percentage of consumers behind 90 days or more on their credit cards fell to 0.74 percent during the first quarter of 2011, as indicated by TransUnion's consumer credit database. Down from 0.82 percent in the previous quarter, the 90-day delinquency rate has dropped by about a third from the same period a year earlier.

Credit card borrowers dropped nearly six percent of their debt load during the first quarter of the year, Equifax reported. With borrowers paying down holiday debt and continuing good spending habits developed during the recession, Equifax officials told reporters that the average credit card borrower now carries a balance of just $4,679. Analysts at the credit bureau hadn't seen a figure that low since the third quarter of 2000.

In the same report, TransUnion officials announced that new credit card accounts grew by 24 percent between the first quarters of 2010 and 2011. The figure echoes a 27 percent increase in new credit card originations reported by Equifax days earlier. Equifax spokesperson Michael Koukounas attributed the positive trends to more timely closures of inactive accounts and stronger focus by lenders on their consumer credit card portfolios.

Standard & Poor's Ratings Services tracked a similar drop in credit card lenders' charge-off rates, the percentage of delinquent accounts written off as bad debts and often sold to third party bill collectors for pennies on the dollar. After reaching a record high of 12.6 percent in February 2010, S&P reported a charge-off rate of just 8.4 percent for March 2011. According to S&P reports, gradual drops in credit card late payments and charge-offs have generally mirrored the easing unemployment rate over the past few months.

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