More U.S. credit card holders are paying their bills on time, lowering the rate of credit card delinquency to the lowest it has been since 1994, according to TransUnion.
TransUnion is one of the three nationwide credit reporting and analytical firms in the U.S.
TransUnion reported that the ratio of credit card accounts that are more than 90 days past due dropped to 0.57% in the second quarter of 2013, down from 0.63% in the second quarter of 2012. That 0.57% is only one basis point from the all-time low of 0.56%, set in 1994.
The firm also reported that credit card debt per borrower dropped year over year, but only very slightly. In the second quarter of 2012, cardholders owed $4,971 per cardholder whereas they owed only $4,965 in the second quarter of 2013.
“Despite recent improvements in the employment situation, consumers continue to value their credit card relationships as a primary means of liquidity. This is best demonstrated by the historically low credit card delinquency rates we observe today,” said Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit.
“Credit card debt also remains relatively low, and while we did observe a quarterly rise in debt, we would need to see a few more quarters of increases to describe it as a significant trend,” Becker said.
“Having said that, the data supports that consumers will continue to prioritize their credit card relationships over other credit obligations, and delinquencies should remain low into the near future,” he said.