Americans Increase Credit Card Debt in Fourth Quarter of 2013, but Late Payments Remain Low

Americans took on more credit card debt in the final quarter of 2013, but the national late-payment rate remained low, according to credit reporting agency TransUnion.

In the October-December quarter, the rate of credit card payments at least 90 days overdue was 1.48 percent, up from the previous quarter but down from the same period in 2012. Average card debt per borrower also rose slightly, reflecting the typical increase in spending during the holiday season.

Despite the uptick in late payments and balances, the delinquency rate remains below the average rate over the past six years. TransUnion projects the rate to increase slightly in the first quarter of 2014.

After the Great Recession, credit card borrowing declined as consumers became more cautious. However, over the past year, consumers have become more confident and willing to take on debt, with credit card borrowing slowly increasing.

While credit card debt is still below its peak in 2008, the number of new credit card accounts opened by consumers has been on the rise. However, there are still fewer active credit card accounts compared to pre-recession levels.

Overall, consumers are managing their credit cards effectively and are not seeking additional credit at this time, according to TransUnion’s data. Despite the increase in credit card debt, the low late-payment rate suggests that consumers are handling their finances responsibly.