After years of Americans’ avoidance tactics regardingdebt – bankers were too hesitant to lend and borrowers too nervous to take on loans after the financial crisis – it appears that both parties are warming up. Lending is on the rise, anddelinquency rates have remained low as well, suggesting that consumers may be able to handle the increased use of credit. However, the American Bankers Association (ABA) stated that these numbers may not stick.
The ABA shared in a recent statement that bank card delinquency rates fell in the third quarter of 2012 to the lowest level since 1994, as a result of more financial stability among users. But, as promising as this sounds, there is still reason to be skeptical.
“Many consumers will see their real disposable income take a significant hit in the New Year,” ABA chief economist James Chessen said in the statement. “Changes in payroll withholding will decrease disposable income, reducing retail sales and making it more difficult for some people to meet their financial obligations.”
The ABA’s fourth quarter default rates may find this the case, especially since Standard and Poor’s found that bank card delinquency rates increased in the fourth quarter of this year, along with first and second mortgages.
For banks providing credit cards, credit risk monitoring tools can keep the delinquency rates down, especially as more households feel comfortable taking on more debt. And as credit card applications rise – the FDIC found credit card debt rose by $2 billion in the fourth quarter of 2012 – financial institutions can continue to provide cards to qualified borrowers while helping to keep the default rates to a minimum.
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After years of Americans’ avoidance tactics regardingdebt – bankers were too hesitant to lend and borrowers too nervous to take on loans after the financial crisis – it appears that both parties are warming up. Lending is on the rise, anddelinquency rates have remained low as well, suggesting that consumers may be able to handle the increased use of credit. However, the American Bankers Association (ABA) stated that these numbers may not stick.
The ABA shared in a recent statement that bank card delinquency rates fell in the third quarter of 2012 to the lowest level since 1994, as a result of more financial stability among users. But, as promising as this sounds, there is still reason to be skeptical.
“Many consumers will see their real disposable income take a significant hit in the New Year,” ABA chief economist James Chessen said in the statement. “Changes in payroll withholding will decrease disposable income, reducing retail sales and making it more difficult for some people to meet their financial obligations.”
The ABA’s fourth quarter default rates may find this the case, especially since Standard and Poor’s found that bank card delinquency rates increased in the fourth quarter of this year, along with first and second mortgages.
For banks providing credit cards, credit risk monitoring tools can keep the delinquency rates down, especially as more households feel comfortable taking on more debt. And as credit card applications rise – the FDIC found credit card debt rose by $2 billion in the fourth quarter of 2012 – financial institutions can continue to provide cards to qualified borrowers while helping to keep the default rates to a minimum.
[:es]After years of Americans’ avoidance tactics regardingdebt – bankers were too hesitant to lend and borrowers too nervous to take on loans after the financial crisis – it appears that both parties are warming up. Lending is on the rise, anddelinquency rates have remained low as well, suggesting that consumers may be able to handle the increased use of credit. However, the American Bankers Association (ABA) stated that these numbers may not stick.
The ABA shared in a recent statement that bank card delinquency rates fell in the third quarter of 2012 to the lowest level since 1994, as a result of more financial stability among users. But, as promising as this sounds, there is still reason to be skeptical.
“Many consumers will see their real disposable income take a significant hit in the New Year,” ABA chief economist James Chessen said in the statement. “Changes in payroll withholding will decrease disposable income, reducing retail sales and making it more difficult for some people to meet their financial obligations.”
The ABA’s fourth quarter default rates may find this the case, especially since Standard and Poor’s found that bank card delinquency rates increased in the fourth quarter of this year, along with first and second mortgages.
For banks providing credit cards, credit risk monitoring tools can keep the delinquency rates down, especially as more households feel comfortable taking on more debt. And as credit card applications rise – the FDIC found credit card debt rose by $2 billion in the fourth quarter of 2012 – financial institutions can continue to provide cards to qualified borrowers while helping to keep the default rates to a minimum.
[:it]After years of Americans’ avoidance tactics regardingdebt – bankers were too hesitant to lend and borrowers too nervous to take on loans after the financial crisis – it appears that both parties are warming up. Lending is on the rise, anddelinquency rates have remained low as well, suggesting that consumers may be able to handle the increased use of credit. However, the American Bankers Association (ABA) stated that these numbers may not stick.
The ABA shared in a recent statement that bank card delinquency rates fell in the third quarter of 2012 to the lowest level since 1994, as a result of more financial stability among users. But, as promising as this sounds, there is still reason to be skeptical.
“Many consumers will see their real disposable income take a significant hit in the New Year,” ABA chief economist James Chessen said in the statement. “Changes in payroll withholding will decrease disposable income, reducing retail sales and making it more difficult for some people to meet their financial obligations.”
The ABA’s fourth quarter default rates may find this the case, especially since Standard and Poor’s found that bank card delinquency rates increased in the fourth quarter of this year, along with first and second mortgages.
For banks providing credit cards, credit risk monitoring tools can keep the delinquency rates down, especially as more households feel comfortable taking on more debt. And as credit card applications rise – the FDIC found credit card debt rose by $2 billion in the fourth quarter of 2012 – financial institutions can continue to provide cards to qualified borrowers while helping to keep the default rates to a minimum.
[:tr]After years of Americans’ avoidance tactics regardingdebt – bankers were too hesitant to lend and borrowers too nervous to take on loans after the financial crisis – it appears that both parties are warming up. Lending is on the rise, anddelinquency rates have remained low as well, suggesting that consumers may be able to handle the increased use of credit. However, the American Bankers Association (ABA) stated that these numbers may not stick.
The ABA shared in a recent statement that bank card delinquency rates fell in the third quarter of 2012 to the lowest level since 1994, as a result of more financial stability among users. But, as promising as this sounds, there is still reason to be skeptical.
“Many consumers will see their real disposable income take a significant hit in the New Year,” ABA chief economist James Chessen said in the statement. “Changes in payroll withholding will decrease disposable income, reducing retail sales and making it more difficult for some people to meet their financial obligations.”
The ABA’s fourth quarter default rates may find this the case, especially since Standard and Poor’s found that bank card delinquency rates increased in the fourth quarter of this year, along with first and second mortgages.
For banks providing credit cards, credit risk monitoring tools can keep the delinquency rates do
wn, especially as more households feel comfortable taking on more debt. And as credit card applications rise – the FDIC found credit card debt rose by $2 billion in the fourth quarter of 2012 – financial institutions can continue to provide cards to qualified borrowers while helping to keep the default rates to a minimum.
