Americans get better at paying credit card debt
The rate of late payments has plunged to nearly a 20-year low. Are we getting more responsible?
The rate of late payments on credit cards has plunged to 0.57% -- the lowest level in nearly 20 years, according to credit reporting company TransUnion. The historical average since 1992 has been about 1.03%, The Associated Press reports.
The amount of money sitting on Americans' credit cards has dropped 16.5% from 2008 to $2.7 billion in June.
It's not that Americans are ditching credit cards altogether. We still carry some pretty hefty balances -- about $4,965 per borrower, on average. And the number of new credit card accounts opened by consumers is going up, The AP reports.
We're just getting better about making payments on time.
Citigroup's (C) credit card index seems to confirm that as well. The company's charge-offs, which are accounts written off as losses, made a 25% improvement over the last year to 2.91%, Quartz reports. And delinquencies have dropped in 35 of the last 41 months to 1.77% in June.
So what's happening? Are we suddenly in a new era of responsibility and self-imposed austerity? Yes, analysts say. "A lot of families have worked hard to deleverage," Ezra Becker, the vice president of research at credit bureau TransUnion, told The Wall Street Journal earlier this month.
Here's another reason: Consumers might be a little clearer about the terms of their credit cards and the penalties for skipping payments, Quartz reports. New regulations discourage banks from sneaky promotions and other tricks designed to make people pay late.
And now that we've cleaned up our financial act, where do we go from here? Shopping, of course. Americans have shoveled away enough debt that they're feeling more confident about borrowing again to buy cars and homes, The Journal reports.
While total consumer debt is now at about $11.15 trillion -- the lowest level since 2006 -- loans for new cars and trucks rose by about $20 billion in the second quarter from the previous quarter, The Journal reports.
- All-out war on unpaid internships
- Fracking leaves property values tapped out
- Can Kodak find a new moment after bankruptcy?
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
More than 70 percent of the Class of 2012 took out loans. Oh, and they're seeing high unemployment, too.
- Wall Street finally notices Bitcoin
- Part-time workers hurt by on-call system
- 5 myths about late payments and your FICO scores
- Auto loan interest rates hit record low
- Should the US scrap the debt ceiling?
- Will new mortgage rules mean fewer lenders?
- Why GM, Chrysler are riding high
- Survey: Dashboard lights fail to send right message
- Can you opt out of Medicare?
[BRIEFING.COM] The drive for five continued today and it was a success. For the fifth straight session, the S&P 500 ended lower. Like the previous four sessions, though, the losses were fairly modest in scope. The S&P 500 declined 0.4%, bringing its total loss for the five sessions to 22 points or 1.2%. All in all, that still qualifies as a pretty tame slide considering the S&P 500 had risen 150 points, or 9.1%, over the previous eight weeks.
Today's ... More
More Market News
The retailer labels the character's fake memoir as non-fiction. This comes weeks after it categorized the the Bible as fiction.