A bizarre trend has come up in the news recently, something of an anomaly you might say. It’s been reported that Americans are racking up a sky-high amount of debt these days, at a rate that is up 6% from last year during the same time. But the funny thing is, late payments are at an 18-year low. So Americans are swiping their plastic more, or simply for bigger purchases, but are being diligent about paying it off on time. Responsible? Irresponsible? Good money management? Bad? I see it as a positive sign, because we’re not seeing the trend of oodles of debt followed by a general inability to make payments. Quite the opposite. Read the CBS article (taken from the Associated Press) and decide for yourself:
“Americans are carrying more credit card debt than a year ago, yet the late-payment rate for card holders remains near an 18-year low, an analysis of consumer-credit data shows.
The average credit card debt per borrower in the U.S. grew about 6 percent in the second quarter from a year earlier, credit reporting agency TransUnion said Tuesday.
At the same time, the rate of payments at least 90 days overdue inched higher to 0.63 percent from 0.60 percent in the same period last year, when the rate hit the lowest level in 18 years. Card delinquencies sank to 0.56 percent in the third quarter of 1994, the firm said.”
Click here to read the latest data for how consumers have been managing their credit card use recently.
I do think it’s refreshing to see what is apparently going on here is that more and more consumers are buckling down and making it a priority to chip away at their debt. It would seem that more and more consumers are choosing to obtain credit cards and use them as well, according to the article, but let us focus on the positives here, shall we? Everyone needs some sort of credit history to build their score, and all these borrowers paying back their debts on time are probably enhancing their scores as we speak. Go team USA!