There was good news last week for the nation’s credit card holders. The total revolving consumer credit card debt continues to fall along with default rates.
According to Forbes.com default rates were down at four (Discover, American Express, Chase, Bank of America) of the top six credit card issuers. Only Citigroup and Capital One saw increases. Is this because people are spending less? Quite possibly.
One reason consumers are able to keep up with their payments is that balances have dropped sharply since the height of the recession. Lower balances translate to lower minimum payments.
The Federal Reserve says that total revolving credit balances has dropped from $958 billion at the peak in 2008 down to $793 billion in July of this year. Charge-off rates have declined as well from a high of 10.96% in the second quarter of 2010 to just 5.6% in the second quarter of this year. [Read more…]