| TransUnion Credit Card Report |
| By Credit Federal |
Published
06/22/2008
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Credit Report
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TransUnion Credit Report Bureau Trend Analysis
TransUnion released the results of its analysis of trends in the credit card lending industry for the first quarter of 2008. The report is part of an ongoing series of quarterly consumer lending sector analyses focusing on credit card, auto loan and mortgage data that may be found on TransUnion's Web site.
For the first time since the beginning of last year, average credit card debt and national credit card loan delinquency (the ratio of borrowers 90 or more days past due) experienced statistically relevant quarterly declines.
National average credit card debt per credit card borrower dropped 1.25 percent from the previous quarter's $1,694 total to $1,673, though the total remains 5.6 percent higher than the same period last year ($1,584). The highest state average card debt per credit card borrower was in Alaska at $2,378, followed by Tennessee at $2,013 and Alabama at $2,005. The lowest average credit card debt per credit card borrower was found in Iowa ($1,252), North Dakota ($1,265) and South Dakota ($1,365).
The steepest increases in average credit card debt over the previous quarter occurred in Alaska (1.54 percent), Hawaii (1.45 percent) and Alabama (0.44 percent). The District of Columbia experienced the largest drop in its average credit card debt (-4.38 percent), followed by North Dakota (-4.0 percent) and West Virginia (-3.67 percent).
Nationally, the ratio of credit card borrowers delinquent on one or more of their credit cards declined to 1.19 percent in the first quarter of 2008, down 12.5 percent over the previous period. However, the total still remains higher than the same period last year (0.91 percent). Delinquency was highest in Nevada (1.74 percent), followed closely by Mississippi (1.53 percent) and Florida (1.51 percent). The lowest credit card loan delinquency rates were found in North Dakota (0.67 percent), Utah (0.75 percent) and South Dakota (0.79 percent).
"As a whole, the recent deceleration, however slight, in the mortgage delinquency rate is reflected in the bank card market as consumers take stock of their overall debt and begin to catch up on their repayment schedule wherever possible," said Ezra Becker, principal consultant in TransUnion's financial services group. "Even states like California, Florida, and Nevada who have experienced large increases over the last four quarters in their bank card delinquency rates showed a drop in the first quarter."
The analysis found that the drop was not just regional but across the board for each state. The District of Columbia experienced the smallest drop in delinquency (-6.4 percent) while North Dakota's delinquency rate dropped the most (-27.2 percent) from the previous period.
"Although the national 90-day delinquency rate is expected to drop slightly next quarter as consumers continue to take stock of their overall debt, forecasts for the remainder of the year see delinquency to gradually edge back up to 1.20 percent and above, as increases in gas prices add to the overall financial burden of the consumer," said Becker.
As for state projections, Nevada (1.7 percent) is still anticipated to experience the highest average delinquency rate by the end of 2008, while North Dakota is expected to show the lowest level of delinquency (0.6 percent).
The source of the underlying data used for this analysis is TransUnion's Trend Data, a one-of-a-kind database consisting of 27 million anonymous consumer records randomly sampled every quarter from TransUnion's national consumer credit database. Each record contains more than 200 credit variables that illustrate consumer credit usage and performance. Since 1992, TransUnion has been aggregating this information at the county, Metropolitan Statistical Area (MSA), state and national levels.
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