Most Americans are aware of the general sway of the U.S. Economy – whether it’s up or it’s down, growing quickly or slowly. Often, our debt levels reflect these trends. Indeed, economists use the national credit card debt figures as a way to determine valuable information about current economic trends.
Many people may not be aware, however, the credit card debt also follows seasonal fluctuations. In general, debt rises at certain times of the year and falls at other times.
This year, credit card debt in Washington and across the country followed this trend as the number of late payments rose slightly in the third quarter. Economists say it’s normal for late payments to rise at this time of the year, partially in response to back-to-school shopping. This year, the third-quarter delinquency rate was 1.36 percent, an increase over the second quarter numbers, which totaled 1.27 percent.
Delinquencies often rise the fourth quarter of each year as well, as a result of holiday shopping. This year, delinquencies originating from the fourth quarter are expected to be around 1.48 percent.
In general, these numbers are down from 2008. At that time, delinquency was relatively high in response to the economic crisis that put a great number of Americans into bankruptcy. Since then, more Americans have been saving more and spending less.
Of course, in this sluggish economy, many Americans are still in serious financial trouble. Credit card debt is an enormous concern for thousands of people, one that not everyone will be able to overcome. When debt reaches a certain point, bankruptcy is often the best option for people who are looking for a way to get back on their feet.
Source: USA Today, “Credit card late payment rate rises slightly” Alex Veiga, Nov. 20, 2013