2/22/2012 9:23 AM ET
(RTTNews) - U.S. consumers may be getting back to their pre-recession habit of spending more than they can afford, according to the latest figures from credit trend data provider TransUnion LLC.
The Chicago, Illinois-based company noted that national credit card delinquencies for the fourth quarter declined 5 percent from last year in the U.S., but grew 10 percent sequentially from the third quarter.
Despite the uptick in delinquencies during the holiday shopping quarter, the annual rate of Americans failing to pay their credit card bills in 2011 was the lowest since 1995.
"This is the net result of riskier loans having worked their way through the system, cautious risk management strategies on the part of lenders and consumers working to maintain the health and good status of their card relationships," said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit.
A declining delinquency rate is a sign that fewer customers are having trouble dealing with their credit card debt and are paying off debt on or before the due date.
Credit card companies are eager to take advantage of the resilient American shopper -- the number of new cards issued to consumers rose 14 percent in 2011 to about 42.3 million, according to TransUnion.
In a sign of thawing credit conditions, more than 10 million cards were reportedly issued to consumers with dubious credit histories.
The credit card delinquency rate in the US recorded a drop of 4.88 percent to 0.78 percent in the fourth quarter, from 0.82 percent in the year-ago quarter. However, the rate rose 9.86 percent sequentially from 0.71 percent in the third quarter.
Mississippi, with 1.25 percent, tops the list of states with highest credit card delinquencies, while Alaska was the lowest with 0.41 percent, also declining the most with a 24.07 percent drop.
The company noted that the current low delinquency rates are despite a shift toward non-prime borrowers beginning in the second half of 2010 and continuing through the fourth quarter. Many lenders have focused on originating cards in the non-prime market due to the fierce competition among lenders for prime borrowers.
The data provided by TransUnion typically contains delinquent loans that have payments overdue for more than three months or 90 days. TransUnion provides a quarterly analysis of credit-active U.S. consumers.
However, average credit card debt per borrower increased 4.80 percent in the fourth quarter to $5,204, and increased 9.27 percent sequentially from the third quarter.
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