Decrease In Credit Card Defaults
The number of consumers defaulting on credit cards is dropping, according to the latest index from Standard & Poor and Experian.
The S&P/Experian Consumer Credit Default Indices showed that all five credit lines' monthly default rates decreased.
The reports also found that for the first time since December 2009, bank card default rates dipped. It went from a 9.1 percent default rate in April to 8.9 percent in May. It's also an 8 percent decrease year-over-year.
Mortgage numbers also showed improvement. First mortgage default rates came in at 3.4 percent and for second mortgages it was 2.4 percent. Auto loans also fell 0.1 percent during May.
David Blitzer, Standard & Poor Index Committee managing director and chairman said that "the declines reflect continuing efforts by consumers to bring their debt levels down following the financial crisis and recession. Data from the Federal Reserve confirm a general pull back from many forms of debt." He added that these improvements will lead to "re-establishing consumer financial stability."
With fewer consumers defaulting on various credit lines, it's less likely they will need to seek out debt relief programs to sort out their financial predicaments.