Americans are paying their bills, and consumer credit defaults are way down, according to some new data.
S&P Dow Jones Indices and credit bureau Experian said that the national composite rate of consumer credit defaults for June was just 1.02%. This is the lowest rate recorded in ten years.
This tells us that Americans are paying on their various forms of consumer debt at the best rate since the recession.
The companies did point out that auto and bank card defaults were up slightly, while mortgage defaults were down. This tracks with recent data showing that Americans are taking on more credit card and auto loan debt, but are feeling better about mortgages given the recent recovery in home prices.
Bank card debt saw a ten-year low in March 2014, but has risen slightly since then, to 3.02% in June. First mortgage defaults, however, fell to a rate of just 0.89% in June.
Dallas was the only major city to experience an increase in default rates during June, while Chicago, Los Angeles, Miami and New York fell to their lowest overall default rates since the last recession began.
Overall, this is good news for the economy as it signals an increase in Americans’ ability to pay on debt — even as they take on more of it. Given the strong jobs report posted in June, it’s likely that we’ll continue to see only modest increases in consumer debt defaults in the months ahead.
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