Smart Borrower Blog

Credit Card Debt Increased in Third Quarter

Nov 21st, 2012 @ 8:32 AM by Amber Nelson

American consumers took on more credit card debt in the third quarter of this year, according to credit agency TransUnion, but the rise falls within normal seasonal patterns, it says.

Credit card borrowers carried an average debt load of $4,996 between July and September, a 4.91 percent increase from the third quarter of 2011 and a 0.5 percent rise from the second quarter of the 2012.

Ezra Becker, vice president at TransUnion’s financial services business unit, says that increased spending on cards is normal for both the third and fourth quarters, as consumers spend more on school supplies and vacations in the summer and holiday purchases in the late fall.

By historical standards, U.S. credit card debt is near the bottom, prompting TransUnion to predict that this third quarter increase is part of the traditional cycle, and not a sign of economic trouble.

‘‘We definitely see consumers being more conservative in their spending and making every effort to pay down the balances and maintain the health of those card relationships,’’ he said in a CNBC article.

Delinquency rates also grew in the third quarter. The rate of borrowers who were 90 days or more behind on their credit card payments rose to 0.75 percent, up from 0.63 percent in the second quarter and 0.71 percent from the same time last year.

Again, TransUnion sees this as a normal seasonal rise.

“Credit card delinquencies are following a pattern similar to what we observed in 2011, with declines in the first two quarters of the year followed by an increase in the third,” Becker said in a MarketWatch press release. “With both delinquencies and debt levels remaining quite low relative to historical norms, we are confident in the continued stability of credit card usage patterns in the short term.”

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to and

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