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Fall in credit card delinquency leads nation

TransUnion.com has released the results of its analysis of trends in the credit card lending industry for the third quarter of 2009. The report is part of an ongoing series of quarterly consumer lending sector analyses focusing on credit card, auto loan and mortgage data available at www.transunion.com/trenddata.

Information for this analysis is culled quarterly from approximately 27 million anonymous, randomly sampled, individual credit files, representing approximately 10 percent of credit-active U.S. consumers and providing a real-life perspective on how they are managing their credit health.

The national credit card delinquency rate (the ratio of bankcard borrowers 90 days or more delinquent on one or more of their credit cards) dropped to 1.1 percent in the third quarter of 2009, down 5.98 percent over the previous quarter. Year-over-year, credit card delinquencies remained essentially flat from 1.09 percent in the third quarter of 2008.

Mississippi saw the largest quarter-over-quarter drop of 13.4 percent in credit card delinquency. In comparison to last quarter, where no state experienced a quarterly increase in delinquency rates, the third quarter saw eight states log an increase.

Average credit card borrower debt (defined as the aggregate balance on all bank-issued credit cards for an individual bankcard borrower) drifted downward nationally 1.87 percent to $5,612 from the previous quarter’s $5,719, and down 1.71 percent compared to the third quarter of 2008 ($5,710).

“For the first time in 10 years, third quarter national delinquency rates showed a decrease from the previous quarter, indicating a departure from the usual seasonal patterns,” said Ezra Becker, director of consulting and strategy in TransUnion’s financial services group.

“With positive GDP now being reported along with an expectation that the national saving rate will drift downward in the fourth quarter, TransUnion sees its year-end forecast for 90-day credit card delinquency rate remaining steady at approximately 1.1 percent nationally, with a possible drift upward in the beginning of 2010.”

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