Home > Personal Finance > New Study: Consumers Better With Their Credit

Comments 0 Comments

Americans have generally been very good about paying their credit card bills on time since the end of the recession, and that trend continued in April. However, the number of seriously late accounts the nation’s largest credit card lenders wrote off as being uncollectable increased for the first time all year in April, largely due to a calendar oddity for Citi, which gave the institution an additional three days to strike delinquent accounts from its records, according to new statistics from Fitch Ratings. In all, the charge-off rate increased to 5.44 percent of all balances, up from 5.17 percent in the same month last year. However, discounting the accounts added because of Citi’s extra time to strike balances from its books, the charge off rate remained more or less flat.

[Free Resource: Check your credit score and report card for free before applying for a credit card]

Meanwhile, the rate at which consumers allowed their slightly delinquent accounts to fall 60 days or more behind on payments slipped once again in April, dipping to just 2.03 percent of all balances, the report said. That’s down from 2.14 percent a year earlier, and a low not seen in the past 17 years.

Free Tool: Credit Report CardEven accounts that tend to have higher instances of both delinquency and default saw declines in both, the report said. Credit cards issued by retailers, which have broader qualification standards and therefore experience more late payments, saw defaults slip to 7.99 percent of all balances, close to pre-recession levels and down from 10.59 percent in April 2011. Meanwhile, 60-day delinquencies on these balances fell to 2.98 percent. This was the first time late-stage delinquencies on these accounts has been below 3 percent in six years, and continued to sink well below the average rate of 4.11 percent for this type of card since Fitch began tracking these metrics in 2004.

[Credit Cards: Research and compare credit cards at Credit.com]

In general, consumers have been far more conscientious in paying down their outstanding balances since the end of the recession, which has led to many having improved credit standings. During the economic downturn, millions could not make their payments on time and as a consequence, their credit scores declined significantly. Only recently have lenders begun opening new offers to these subprime borrowers.

Image: bandita, via Flickr

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team