Credit card delinquencies fell to 2.93% in the second quarter, the lowest level since 2001, according to the American Bankers Association.

This marks the first time the rate has been below 3 percent in that 11-year period. The rate is down from 3.08 percent in the first quarter. Fitch Ratings  said  in a Oct. 4, report that 60-day delinquency index gapped down to 1.69%, a drop of seven basis points from August.

The drop-off in delinquencies means more Americans are making their credit card payments on time.

"Paying their bills on time means cardholders are more financially prudent, avoiding late fee charges," said Bill Hardekopf, CEO of, in a report today. "It may also be an indication that consumers are in better financial shape as the holiday shopping season begins, a time when spending and debt usually increases."

Credit card borrowers have also increasingly opted to deleverage their debt positions. In other words, these people use credit cards not so much for credit but for convenience. According to Ildiko Szilank, a director in ABS ratings S&P’s who spoke to ASR on credit card securitization trends,  the percentage of obligors who are able to pay down their debt each month and mostly use their credit cards for rewards or points increased in the securitization pools over the recession.

Lower delinquencies has led to a drop-off in charge offs, according to Fitch's  charge-off index. September charge offs were four point twenty nine percent, a drop of 43 basis points drop from August 2012. Charge offs had increased in August because of a one-time policy charge in the recognition of charge-offs at Chase Bank. September's figure remain much lower than the historical average of five point ninety five percent.


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