Credit Card Delinquencies Continue to Fall

Whether a rare occurrence or an indication that consumer finances are becoming more stable, for the fourth month in a row reports for April have shown that credit card delinquencies continue to drop. Since the beginning of the year, credit card delinquencies have slowly declined for many of the major credit card issuers (American Express, Citi Bank, Bank of America, Discover, Chase and Capital One). However with such decreases, one issuer’s (Bank of America) defaults also know as write-offs slightly increased.  Even with the small increase, some experts are expecting B of A to report decreases in future months just like many of their competitors.

When looking at credit card delinquencies one must remember that they are essentially the measure of the number of credit cardholders more than 30 days late on their payments. Even as delinquencies continue to fall, many believe that economic data still shows that card issuers are not in the clear yet. As unemployment rates still remain high, experts state that credit card defaults will stay at the levels we are seeing today. In addition to that recent data on payments has been artificially inflated by the use funds that are not available to consumers year round. With this they report that many cardholders are using tax refunds to pay on credit card debt and this could result in continuation of delinquencies and defaults by those same cardholders moving forward.