Spending is On the Rise while Credit Card Defaults Continue to Fall

All but one major credit card issuer reported decreases in their customer default rates for April. This, coupled with a rise in credit card spending, indicates an improvement in overall financial health of the average consumer.

Here’s the how the numbers fleshed out, according to the Associated Press:

American Express had the lowest late payments rate at 1.7 percent, down from 1.8 percent in March. It’s charge-off rate (a measure of uncollectible card balances) fell to 3.5 percent from 3.7 percent.

CitiGroup’s delinquency rate fell to 3.87 percent in April, down from 4.21 percent the month before. The bank’s charge-off rate declined to 7.85 percent from 7.89 percent.

Capital One’s late payment rate dropped to 3.41 percent from 3.59 percent, and its charge-off rate was 4.97 percent down from 5.87 percent.

Discover’s delinquency rate sank to 3.15 percent from 3.42 percent in March as its charge-off rate fell to 5.02 percent from 5.18 percent.

JPMorgan Chase had a late payment rate of 2.86 percent, down from 3.08 percent. Charge-offs dropped to a rate of 5.6 percent from 6.02 percent.

Only Bank of America reported an increase in charge-offs with the rate rising to 8.25 percent in April, up from 8.18 percent. However, its late payment rate still fell from 3.08 percent to 2.86 percent.

Meanwhile, all three major credit card companies, Visa, MasterCard, and AmericanExpress, saw an increase in credit card spending during the first quarter of this year.

“The dust is slowly coming off credit cards,” said Gregory Daco, a senior economist with IHS Global Insight as quoted on the Forbes blog. “It is a general return of consumers to credit card usage, but it is a cautious one. Income is lower and slowly making a comeback right now.”

So whether or not this means much in terms of speeding up the economic recovery it is certainly a step in the right direction.