Wednesday, August 17, 2011

Credit card delinquency rates at a record 17 year low

Credit cardsImage via WikipediaCredit card users have gotten serious about their debts, this new found responsibility has driven down the credit card delinquency rate to a 17 year low of 0.6%. This according to credit reporting agency TransUnion.

"National credit card delinquency rates have fallen to levels not seen since 1994 as consumers continue to tighten their spending," said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit.

              Link to TransUnion's Infographic Of State By State Delinquency

The 0.6% delinquency rate, which reflects borrowers 90 or more days past due is down from 0.74% in the prior quarter and 0.92% a year earlier. TransUnion also reported that even though the average credit card debt per borrower rose 0.42%, it still is down 5.1% as compared to one year ago.

Of all the states, Alaska, North Dakota and Iowa showed the lowest delinquency rates. The highest delinquencies were in Nevada, Georgia and Florida.

Why does Florida rank at the lower end of the scale?

Like Nevada, Florida has more of a problem with it's real estate market. Residents have found themselves more devastated by the real estate bubble bursting. With home values rising the highest and in result falling the farthest, many homeowners find themselves either in foreclosure or without a job. This explains how the average household is juggling between the paying of their mortgage or their credit cards. 

TransUnion's explanation for the falling delinquency rate is people are treating their debts more seriously and paying them off more quickly. Also lenders are more selective to who they give credit to.

Still Florida's stagnant real estate problems are a big drag on the local economy.The construction business is as important to Florida as it's tourist business which is also stumbling. Much of the population counts on these businesses for their livelihood, along with the supporting businesses. These statistics are not going to change until we can get people back to buying homes and spending money.

Florida has grown by a constant influx of people who wish to live in our great climate and vacation here. The climate is not broken just our economy. Florida is like the tail on the dog, get the country back to work and Florida will be where they spend their money.

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