NEW YORK (MainStreet) -- The consumer credit card debt problem seems to be in remission, as research keeps rolling in from various credit card firms and government agencies that Americans are doing a much better job of handling their plastic-induced financial headaches.
According to information from the New York Federal Reserve’s Household Debt and Credit Report, for the second quarter of 2011 delinquency rates and “serious” delinquent balances were 15% below levels at the end of the second quarter of 2010.
“Outstanding consumer debt remained essentially flat, down just $50 billion, in what was basically a repeat of the previous quarter. This is more evidence that the pace of consumer deleveraging that began in late 2008 has slowed,” said Andrew Haughwout, vice president in the research and statistics group at the New York Fed, in a statement. “During the next few quarters we will gain a better understanding of whether this is a permanent or temporary break in the decline of total outstanding consumer debt.”
Well, the data continues to mount, and it tends to support the Q2 numbers gathered by the New York Federal Reserve.
Citibank (Stock Quote: C), for example, just reported this week that it’s seeing a big improvement in its credit card debt repayment picture. Citibank says that rates for both credit card delinquencies and late payments are at their lowest levels since 2007.
Here’s the data from Citibank:
Defaults: Citibank says default rates for October were 5.66%, down from 5.87% in September. That’s also a sharp decline from the 10.27% the financial giant recorded a year ago.
Late Payments: Citi says late credit card payment rates were 3.26% in October, down from 3.3% in September, and also down from 4.74% a year ago.
Peak Rates: Citibank says that worst month for charge-offs (when card companies write off credit card debt) was back in March 2010.
Bank of America (Stock Quote: BAC) is also out with some new consumer credit card debt numbers, and they’re just as good as Citibank’s. Bank of America says that card defaults are down from 10.15% in October 2010 to 5.99% in October 2011. Late payments this October were at 3.97%, down from 5.6% a year ago.
All the news on the credit card front isn’t rosy, though.
The New York Fed also points out that Americans are still fuzzy about the actual amount of credit card debt they have accumulated – a surprising statement, given that all consumers have to do is check their credit card statements. The Fed says that the average U.S. household believes they only owe $4,700 in credit card debt, but card carriers don’t agree, claiming the average U.S. household owes $7,134.
But past that, the news on the credit card debt front is actually getting better.
That’s just in time for the high-spending holidays – the next test for budget-conscious cardholders.
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