Midday Market Minute: More Americans Paying Credit Card Bills on Time

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We can give ourselves a collective pat on the back for making progress on our credit card debt. The rate of decline for national credit card delinquencies in the first quarter of this year fell 19 percent compared to the final quarter of 2012.

TransUnion, the credit-rating firm that tracks the numbers, says that's a sharp drop, and it indicates that consumers are doing a better job of making their payments on time, and of getting a better handle on their debt.

You're considered delinquent on your credit card if you haven't made the minimum payment in at least 90 days.

Credit card debt
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The amount of credit card debt we carry is also declining, even though the pace is much slower. The average credit card borrower owes $4,878. That's down 4.8 percent from the previous quarter. Compared to a year ago, it's down 1.7 percent.

Part of the improvement is seasonal. TransUnion says delinquencies and balances due typically decline during the first three months of the year as many of us pay down the debt run up during our holiday shopping sprees.

Many of us also get tax refunds in the first quarter and use some or of all of that to reduce debt.

The decline in the delinquency rate is a sign that many people are getting a better handle on their personal finances, even though millions have still not fully recovered from the recession.

The states that have the highest average credit card debt loads are Alaska, Colorado, North Carolina and Connecticut. Those with the lowest debt levels are all in the Midwest: Iowa, Wisconsin, and North and South Dakota.

Bottom line, the improving numbers are important because delinquency is so damaging to a borrower's credit rating. And once we have our debt under control, we're in a better position to spend a little bit more, which will give a boost to the overall economy.

-Produced by Drew Trachtenberg


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5 Comments

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toosmart4u

A lot of BS going on here today. Check the facts before you believe anything in here. Gave up my credit card many years ago and life is just fine without any credit cards.

May 22 2013 at 9:13 AM Report abuse rate up rate down Reply
ectullis

Really?

May 22 2013 at 7:37 AM Report abuse rate up rate down Reply
juststeve35

Of course we do...

The legislation signed in the very beginning of the Obama Administration allowed the Credit Card Companies to double or triple your interest rates and penalty rates, eliminated Grace Periods and only limited 'fees' and how they could be charged.

By saving us these 'fees', these bought and paid-for criminals in Congress rewarded their Bankster buddies with 5 running years of record profits.

Coincidence?

Yeah, right...

May 21 2013 at 9:52 PM Report abuse +3 rate up rate down Reply
Anne

Yeah, I used Greenpath Credit Counseling to pay mine off. It took me three years, but I got them paid off. It feels good not to have that pressure on me. I will never ever get a lot of credit cards again. Maybe one.

May 21 2013 at 9:38 PM Report abuse +2 rate up rate down Reply
rjggoldstandard

easier to pay credit cards when you don't have an overpriced mortgage anymore.

May 21 2013 at 9:19 PM Report abuse +1 rate up rate down Reply
analyst0042

Wonderful year..Made lots in the stock market...have nice pension...ss...Everything coming up roses in retirement!..Only thing lousy is our leader....well cannot have everything.

May 21 2013 at 8:17 PM Report abuse rate up rate down Reply
mvnup

When the economy tanked and people defaulted or got assistance, I took my money that became worthless sitting in the bank and paid mortgages that I had on investment properties.
I tried to refi at a lower rate but although my money went from earning 5.5% to.5% the banks would not reduce my mortgage interest so I used my money to pay them off. Looking back I should have done what many did and walk away from the properties and stick the bank with them. I could have used the money I had to live it up like most would have done. Now I stuck just trying to maintain what I have.

May 21 2013 at 4:57 PM Report abuse +2 rate up rate down Reply
mvnup

Probably because the people who should not have had credit cards in the first place have defaulted and are out of the equation. Although I pay my cards in full monthly it is becoming harder each month. These stories of an improving economy are out every day yet I have had the worst year ever just this past and do not see it getting better

May 21 2013 at 4:48 PM Report abuse +5 rate up rate down Reply
jcoovber

Maybe our Government ouht to do the same, you know set an example. Not the one they curently set of course.

May 21 2013 at 4:47 PM Report abuse +6 rate up rate down Reply
Jim

Of course the people that still have credit cards and have not defaulted on them are better at paying them on time! The folks suffering from Obamas economy dont have credit cards anymore! I only have one left because I am paying ALL of my credit off ASAP! Get it done folks! Before the crap hits the fan!~!

May 21 2013 at 3:34 PM Report abuse rate up rate down Reply