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Credit Card Delinquency Rates Rise, But Remain Largely In Check With More Cards Issued

The delinquency rate among credit cards increased during the first quarter of 2018 compared with the first quarter of last year, according to data released this morning by TransUnion, but the credit bureau says that there should not be any cause of concern.

The serious delinquency rate — in which no payment has been received for at least 90 days — rose to 1.78%, up from 1.69% a year ago. The delinquency rate is still below the 1.91% which represents the 10-year average, according to TransUnion.

“Though delinquency rates are certainly rising, there are several reasons we don’t believe this to be worrisome at this juncture,” said Paul Siegfried, senior vice president and card and payments business leader at TransUnion. “First, credit card issuers have been relatively conservative over the last five quarters, issuing more credit to lower risk consumers compared to higher risk consumers. Second, the credit they’re extending to consumers in most risk tiers generally includes lower credit limits. Finally, we believe it’s a positive sign for the economy that more consumers have access to credit and that delinquency rates, while growing, are doing so at a slow pace and remain below levels observed post-recession.”

TransUnion noted that delinquency rates in auto loans and credit cards increased from the first quarter of 2017 to the first quarter of 2018 while the delinquency rates on mortgages and personal loans fell during the same period.

“The first quarter of 2018 was relatively quiet in the auto finance space,” said Brian Landau, senior vice president and automotive business leader. “The most noteworthy change was the stabilization in the delinquency rate, likely due to shifts in the makeup of new auto loan borrowers and continued improvements in oil states.”

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