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Credit card delinquencies declined during the past year, with 1.76% of credit card accounts 30 or more days past due in the third quarter. While that’s up slightly from the 1.62% delinquency rate in the second quarter, it’s an improvement from the third quarter of 2012 when the rate was 1.88%.
There’s a seasonality to credit card delinquencies — the second quarter has had the lowest rate for the past three years and the fourth quarter consistently has the highest. But taking a year-over-year look at the data, which came from Experian-Oliver Wyman Market Intelligence Reports and Experian’s IntelliView tool, it’s apparent that Americans have gotten better at making timely bill payments.
The credit card delinquency rate has been below 2% since the first quarter of 2012. The gradual, positive change indicates that consumers are better at managing their debt in the wake of the recession.
Making timely payments is crucial to maintaining a good credit history, because late payments tank credit scores, consequently making it more difficult for a consumer to access other forms of credit and obtain low interest rates on new debts. Financial behaviors have a huge impact on credit scores, which is easy for individuals to see if they monitor their credit. For example, the Credit Report Card is a free tool that allows just that: an easy-to-understand breakdown of financial behaviors and how they affect credit scores.
On a state level, only 10 of the states have a delinquency rate of 2% or higher, and the 50 states and Washington, D.C., have rates ranging from 1.19% to 2.71%. North Dakota and Mississippi are on the low and high ends of that spectrum, as they have been for a while, but even Mississippi had a rate higher than 3% as recently has the fourth quarter of last year.
There’s a stark geographical disparity between states with the highest and lowest delinquency rates: All of the 16 Southern states (as determined by the Census Bureau) have a rate higher than the national average. Virginia, at 1.77%, has the lowest. In contrast, the 10 states with the lowest rates are all over the map, in the Northeast, Midwest, Northwest and Hawaii.
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