Americans continued to cut back on credit card debt and reduce late payments in the third quarter, according to a new report from TransUnion.
Borrowers' average credit card balance fell to $5,235 in the third quarter, a 1.3% decline from the same period in 2012. Consumers were also more likely to pay their bills on time. The national credit card delinquency rate dropped to 1.36% in the third quarter, down 14 basis points from the same period a year ago.
On a quarterly basis, credit card debt remained flat. While the delinquency rate rose nine basis points from the second quarter, TransUnion ascribed the uptick to seasonal changes.
"It appears that, with continued strong credit performance and relatively low debt levels, consumers may be in a strong position to receive more attractive, feature-rich offers from credit card lenders," Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit, said in a Wednesday
Delinquency rates fell or remained flat in all 50 states on a year-over-year basis. Massachusetts, West Virginia and Washington posted the largest declines.
Average credit card balances dropped in every state except Rhode Island and Vermont. Those two states experienced only minimal increases in average credit card debt, according to the report.
Delinquencies are expected to rise to 1.48% in the fourth quarter because of holiday spending, according to TransUnion's forecast. "Credit card delinquencies typically rise in the second half of the year, so this is not worrisome," Becker said.
TransUnion's quarterly Industry Insights Report samples data from 27 million anonymous consumer records.
