Credit card delinquency improves

Credit card deliquency fallingAmerica, give yourself a pat on the back. According to new data from the American Bankers Association, more of us are paying our credit cards and home equity loans on time -- which is good news in a still shaky economy. Bank card delinquencies dropped from 4.39% in the last quarter of 2009 to 3.88% in the first quarter of this year. This rate is actually below the 15-year average for bank-card delinquencies, and is the lowest rate since 2002. (The ABA regards a delinquency as a payment more than 30 days overdue.)

In related good news, we're also becoming more prompt about paying our home equity loans on time. The delinquency rate slipped down a tick this quarter (to 4.12% from 4.32%), the first decline in two years, according to the ABA.

Also on the mend are on-time payments on home equity lines of credit, property improvement loans, auto loans and personal loans. Unfortunately, delinquencies in some loan categories are still on the rise. Americans are blowing off their payments on boats, RVs and mobile homes to an increasing degree, the ABA's research showed.

"The improvement in credit card delinquencies is a sign that consumers are taking a responsible attitude towards their finances by paying down balances and spending more prudently," Carol Kaplan, an ABA spokeswoman, told WalletPop via e-mail. Kaplan also touched on another reason behind the improved numbers: tighter bank lending standards.

This observation is backed up by recent statistics from the Federal Reserve. According to the Fed, overall consumer credit decreased at an annual rate of 4.5% in May, while revolving credit (that's your credit cards and other open-ended loans) dropped a steep 10.5% for the same time period. (Non-revolving credit, which includes things like car loans, dropped a relatively minor 1.4%.)

In other words, we're doing better at managing our money and our credit card debts, but the banks aren't taking any chances; they're increasingly only lending to those of us deemed most likely to pay back our debts on time. At least part of the reason Americans are borrowing less these days is because banks are lending them less.

Whether or not this is a positive development or a negative one, of course, remains up for debate. Readers, what do you think? Is being able to borrow less money in this economy helping us or hurting us?
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