As recently as August, we saw a decline in credit card delinquency rates – the lowest in 20 years, in fact. At the same time, though, we saw an increase in credit card debt. So perhaps it should come as no surprise that the newest numbers show late payments, once again, on the rise.
According to data released by credit reporting agency, TransUnion, credit card payments more than 90 days late rose 0.4 percent in the third quarter of 2012, representing .75 percent of credit card loans, compared to .71 percent in the third quarter of 2011. As for credit card debt, it now stands at nearly $5,000 per borrower, showing an increase of 4.9 percent over the same time last year.
Now with the holiday shopping season upon us, it is probably safe to say credit card debt will see another jump in the fourth quarter of this year. And it will be no surprise if payments more than 90 days late follow a similar trend.
Yet, as troubling as it is to see credit card delinquencies on the rise, the rate pales in comparison to that of student loans. As I blogged yesterday:
For the first time since the Federal Reserve started tracking the numbers, a record 11 percent of student loans are more than 90 days late on their payments. What’s worse, though, is that the number is actually twice that high, as it only represents the loans currently being collected on and not those that are in deferment/non-payment status.
It’s been suggested student loan debt could be at the heart of another financial crisis yet to come. But with credit card debt and delinquencies on the rise too, it sounds like the economy has two strikes against us. Will there be a third?