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Delinquencies on credit cards are at their lowest level in 17 years despite their increased use,...

Delinquencies on credit cards are at their lowest level in 17 years despite their increased use, TransUnion says, as "consumers are using credit cards more responsibly." But the question is whether this is more than a temporary pause in the spend-less, save-more trend; the answer could have big consequences for the economy.
Comments (15)
  • "But the question is whether this is more than a temporary pause in the spend-less, save-more trend; the answer could have big consequences for the economy"

     

    No, that's not the question, because that's not what TransUnion said. In fact, they said the opposite: "consumers made an estimated $72 billion more in payments on their credit cards than purchases between the first quarters of 2009 and 2010."

     

    So there is no pause in the spend-less save more story. On the contrary, this is confirmation that spend-less save more attitude is alive, well and increasing. Consumers are paying off more on their cards than they are incurring.

     

    Or, am I missing something?
    16 Aug 2011, 01:59 PM Reply Like
  • That's what happens when you use one to pay another!
    16 Aug 2011, 02:00 PM Reply Like
  • "That's what happens when you use one to pay another."

     

    Funny, but not right.

     

    Assuming, for the sake of argument only, no new credit card debt purchases, if people simply used one to pay off the other, the outcome would be a perfect balance between pay offs and new debt.
    16 Aug 2011, 02:04 PM Reply Like
  • www.federalreserve.gov...

     

    revolving consumer credit has started to grow again as reported from June 2011 Fed data. Mortgage data still remains weak however.
    16 Aug 2011, 02:07 PM Reply Like
  • Fin858,

     

    Thanks for the data. This would mean that TransUnion's information was dated and that the spend less, save more paradigm is in jeopardy.
    16 Aug 2011, 02:31 PM Reply Like
  • How many can do the math and accrue points (cash) and pay off the cards each month? You are rewarded to use your card, as long as you play smartly.
    16 Aug 2011, 02:07 PM Reply Like
  • It's obvious their spending less.
    16 Aug 2011, 02:09 PM Reply Like
  • I hope they are spending less and paying down debt....that is what they are supposed to do....and its a good thing....
    16 Aug 2011, 02:27 PM Reply Like
  • And those that can are socking away a little more for the (perceived) coming rainy day. And savings is not consumption.
    16 Aug 2011, 06:56 PM Reply Like
  • by definition, savings is future consumption
    16 Aug 2011, 10:41 PM Reply Like
  • Excuse me. Savings is not current consumption leading to growth in business activity.
    16 Aug 2011, 11:12 PM Reply Like
  • Yes, definitely did not mean that in a mean way either.

     

    I have been in the camp that what the Fed is doing to help the consumer is working but only slowly. With such significant value placed on consumption right now (zero interest rates) people are still saving at over 5.5%.

     

    As for the consumer, credit cards were never the issue. Out of the $12T worth of debt the US consumer has, 85% is mortgage debt.
    17 Aug 2011, 07:49 AM Reply Like
  • And there is no fast way to get out of this.
    17 Aug 2011, 08:00 AM Reply Like
  • Most people use cards these days for everything, instead of cash and checks, not just to charge and spread the payments over time. The limited data detail can't really draw you close to any conclusions, other than more folks are paying on time. Banks and mattresses hold the data for savings rates.
    17 Aug 2011, 02:00 AM Reply Like
  • Right, I pay everything with a credit card, I get cash back, so why not? And I have limited liability if the card is lost or stolen (sound like a commercial). I think a lot more people who don't "need" to use a credit card are. Years ago I used it to purchase something I needed but didn't want to dip into savings to pay for.
    17 Aug 2011, 07:08 AM Reply Like
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