Credit Card Debt and Delinquency

Trans Union is out with its quarterly look at active credit card users in the United States. The study looks at some 27 million consumers and while it finds credit card delinquency in the fourth quarter of 2012 may be up from the fourth quarter in 2011, it is not a significant rise. It hit .85%, up from .75%. Ezra Becker is vice president of research and consulting in Trans Union’s financial services business unit.  “You are going to have some delinquency with any credit product but it is really low, it is really well controlled and I think it really indicates that consumers are working hard to maintain those relationships and keep that purchasing power available.” Becker also says that credit card debt-per-borrower increased in the past year. “You always would expect an increase from the third quarter into the fourth quarter that is a seasonal effect that has to do with shopping for the holidays.  Perhaps a more salient measure is the change from the fourth quarter of 2011 to the fourth quarter of 2012 and there we actually see a bit of a drop.” The study shows that more Americans are using credit cards the responsible way, concludes Becker. “You have consumers who are spending money but they are being careful about not building up large balances.  They are using credit for its primary purpose, which is to reconcile that disparity between their income and their expenses.  I really think that all of this points to a well functioning credit market and an expanding credit card market.” Talk to a financial adviser if you are struggling with credit card debt.  They can offer advice on how to lower that debt and use your money more efficiently.