August 26, 2009
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News: Americans Doing A Good Job
Americans are making headway in reducing credit card debt according to a new report by the TransUnion credit reporting agency. The report indicates that although Americans continue to deal with high levels of credit card debt, they have reduced the average debt balance for second quarter to $5,719 a 1.11% drop from first quarter's 1.32%. Although the credit card delinquency rate for the second quarter fell by 11.36%, it still remains at 12.5% over same time last year. Experts are encouraged with the rise in the stock market and the downward trend in card delinquencies; however, remain cautious in that the figures could represent a seasonal adjustment. Never the less, it is good news for Americans who have been struggling to keep their heads above water over the past two years and confirms Moody's recent report that the nation's credit card situation is improving.
TransUnion look at the data from 27 million credit files and found that some states are struggling more than others; Nevada had the highest delinquency rate in the nation. However, Nevada reduced its debt for the quarter to 2.19% down from 2.44% in first quarter. On a positive note, Nevada was number three on the list in reduced credit card debt as they reduced their debt by 2.4% for the quarter. The state's average credit card debt fell to $6,517 from first quarter's $6,677.
TransUnion, the largest credit reporting company in the nation expects the nation's overall delinquency rate will rise to 1.2% by end of year before it begins to decline in 2010. They also speculate that the recent drop on the U.S. unemployment rate to 9.4% in July is encouraging and indicates that the country may have hit the bottom of the recession. If these unemployment numbers continue to decline, lenders should begin to see credit card delinquencies drop even further.