Both the credit card delinquency rate (the ratio of borrowers 90 days or more delinquent on their general purpose credit cards) and the average credit card debt per borrower dropped on a yearly basis in the third quarter ended September 30, according to credit reporting agency TransUnion.
The rate of credit card payments at least 90 days past due was 1.36% in the quarter, up from 1.27% in the previous quarter.
The latest card delinquency rate is still the second-lowest on TransUnion's records, which date to 2007. The third quarter rate was down from 1.50% in the third quarter a year ago. Card balances overall have dropped over the past year and remain near historically low levels.
In the coming months, TransUnion expects the card delinquency rate to rise slightly as many holiday season shoppers delay making credit card payments until early next year.
"While consumer credit card delinquencies increased on a quarterly basis, they continued an overall trend of strong performance as evidenced by the yearly decline, said Ezra Becker, vice president of research and consulting in TransUnions financial services business unit. Our data show that consumers continue to deleverage, with balances dropping in the past year and remaining near historical lows. It appears that, with continued strong credit performance and relatively low debt levels, consumers may be in a strong position to receive more attractive, feature-rich offers from credit card lenders.
Every state experienced either a decline or had their credit card delinquency rates remain flat between Q3 2012 and Q3 2013. The largest delinquency declines occurred in Massachusetts, West Virginia and Washington.
All but two states saw their average credit card balances drop on a yearly basis, and the two states with increases Rhode Island and Vermont experienced only minimal rises.
TransUnion reported 334.23 million credit card accounts as of Q3 2013, up from 327.69 million in Q3 2012. It should be noted that this count was as high as 408.39 million in Q3 2008.
Viewed one quarter in arrears (to ensure all accounts are included in the data), new account originations increased to 11.05 million in Q2 2013, up from 10.41 million in Q2 2012. Though there appears to be more extension of credit card credit, this number pales in comparison to data observed six years ago when there were 17.74 million new account originations in the quarter.