Accounts Receivable Management Featured Article

Credit Card Delinquency Rates, Balances Rise in Third Quarter: TransUnion

December 14, 2012

TransUnion, a company creating advantages for millions of people around the world by gathering, analyzing and delivering information, has released its quarterly analyses of credit-active U.S. consumers, after evaluating their credit management series related to mortgages, credit cards and auto loans.

As per the new report, the national credit card delinquency rate has jumped slightly to 0.75 percent in Q3 2012 from 0.71 percent in Q3 2011. This rate was as slow as 0.63 percent in Q2 2012 – a seasonal record low.

Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit, said the credit card delinquencies are following a pattern similar to what they observed in 2011, with declines in the first two quarters of the year followed by an increase in the third.

"That seasonal consistency is encouraging. Credit card debt trends in 2012 also are mirroring 2011, with a decrease in the first quarter followed by two increases over the next six months. With both delinquencies and debt levels remaining quite low relative to historical norms, we are confident in the continued stability of credit card usage patterns in the short term," Becker added.

The new report also suggests the new credit card originations have achieved 3.14 percent in Q2 2012 compared to Q2 2011, and the share of non-prime, higher-risk originations was 29.55 percent in the second quarter of the year, slightly higher than one year ago (29.28 percent in Q2 2011), and much higher than the 23.86 percent observed in Q2 2010.

Thirty-six states in the U.S. have experienced rises in their credit card delinquency rates year over year, whereas nine states and the District of Columbia saw the declining trend. But this was not the case with California and Nevada, as these two states suffered a hit by the recession and saw a downtrend in their card delinquency rates.

"It is possible that the slight increase in delinquencies year over year can be attributed in part to the increased share among non-prime borrowers of new accounts,” said Becker, “but even so these delinquency numbers are not a cause for concern. We've found that consumers continue to value their credit cards more than ever, and will likely do so at least until unemployment further abates."

Officials at TransUnion say that this forecast is based on seasonality effects and other economic factors such as anticipated gross state product, consumer sentiment, disposable income and employment conditions.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO Miami 2013, Jan 29- Feb. 1 in Miami, Florida.  Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.




Edited by Braden Becker

Article comments powered by Disqus

Related Accounts Receivable Management Articles

1-800Accountant to Distribute Small Business Workbench Tool

If you are a small to mid-sized business (SMB) one of your major challenges-along with attracting and keeping customers-is having a good handle on your cash flow and working capital. Large enterprises can afford the services and tools to give them the real-time view they depend on to run their businesses, but SMBs typically are not in the position to afford such capabilities. However, as with so many business processes, thanks to the Internet and mobile apps, good things can come in small packag… [ Read More ]
12/19/2014

Wheelings and Dealings: Tiger Media to Acquire ARM Firm Interactive Data

As has been the case recently throughout the information and communications technology (ICT) industries this past year has been one that has seen a lot of M&A activity, especially in regards to anything that involves business process automation in general but also in specific verticals. This is a trend that is likely to accelerate in 2015. And, the Accounts Receivable Management (ARM) vendor segment has seen its fair share of such activities. [ Read More ]
12/18/2014

The Beer Store Goes Live on VersaPay's ACRPay Platform

The VersaPay Corporation, a leading cloud-based payment services provider, recently announced that The Beer Store, a Canadian domestic beer distributor, has adopted VersaPay's ARCPay platform. Since going live on Dec. 3 it has become one of VersaPay's largest customers, The Beer Store benefits mainly from increased payment acceptance. [ Read More ]
12/10/2014

Nextech Announces Compliance and Usability Upgrades in Latest Software Upgrade

For those not familiar with the nuances of the handling of Electronic Medical Records (EMRs), including their importance to accounts receivable and payable processes, it is unlikely that you are aware of an important mandated transformation currently underway. What I am referring to is the new regulation promulgated by the U.S. Department of Health and Human Services (HHS) on August 14, 2014 which set October 1, 2015 as the date healthcare providers must comply with rules regarding migration of … [ Read More ]
12/10/2014
FREE Accounts Receivable Management enewslettter.

Events

Weekly Live Demo
Contact Center Solutions

Register Today!


Weekly Live Demo
CaaS Small Center

Register Today!