U.S. consumers took on more credit card debt and made more late payments in the final quarter of 2013, when many consumers use their cards and suspend timely payments in order to supplement holiday spending. The national late-payment rate, however, was still near its lowest level in six years.
Credit reporting agency TransUnion reported that the rate of credit card payments at least 90 days overdue was 1.48 percent in the three-month period -- up from 1.36 percent in the previous quarter but down from 1.61 percent in the fourth quarter of the previous year. Average card debt per borrower increased 1.7 percent from the previous quarter but fell 1 percent from a year earlier. The latest card delinquency rate of 1.27 percent is still below the average rate of about 2.2 percent going back to 2007. TransUnion has estimated that credit card delinquency will increase to about 1.57 percent in the first quarter of 2014.
Credit card borrowing fell after the Great Recession, due to tighter lending standards, job loss, and more cautious spending. In the past year, more confident consumers are more willing to take on debt. Most debt gains have been in auto and student loans; but credit card borrowing also rose by $5 billion in December, the largest jump since May, the Federal Reserve reported. Still, credit card debt is 15.7 percent below its peak of more than $1 trillion in July 2008.
At the same time, the number of new credit card accounts increased 11 percent to just under 12 million in the third quarter, compared to a year earlier. This indicates that lenders are signing up more borrowers to credit card accounts, but the number of accounts is still below the pre-crisis levels.