Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Credit card delinquency on the rise

Reporting agency says 11% increase could be an indication that tax refund checks are being used to cover daily living expenses.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Julianne Pepitone, CNNMoney.com contributing writer

When will you be debt free?
Enter credit card information
  CC name Balance
Choose a plan
Minimum payments only
Fixed payments
$ monthly
Debt-free deadline
I want to pay off my credit cards in:
years and months
How secure do you feel in your job?
  • Extremely secure
  • Fairly secure
  • A little insecure
  • Not secure at all
CDs & Money Market
MMA 0.28%
$10K MMA 0.25%
6 month CD 0.38%
1 yr CD 0.62%
5 yr CD 1.30%

Find personalized rates:

Rates provided by Bankrate.com.

NEW YORK (CNNMoney.com) -- Credit card delinquency rates jumped 11% in the first quarter, possibly indicating that consumers are using tax refunds to pay day-to-day expenses, according to a credit reporting agency report released Monday.

The delinquency rate -- which is the ratio of borrowers 90 days or more delinquent on one or more of their credit cards -- increased to 1.32% in the first quarter of 2009.

That's up 9.1% over the previous quarter, and 11% over the previous year, according to the report from credit reporting agency TransUnion.

The average borrower debt rose 4.09% from the previous year to $5,729, TransUnion said. The agency uses data from 27 million anonymous, individual credit files.

"This increase could be an indication that tax refund checks, typically used to pay down balances in during the first quarter in years past, are now being used to cover daily living expenses," said Ezra Becker, of TransUnion's financial services group, in a written statement.

The economy is losing jobs by the thousands, and mass layoffs and pay cuts have continued the credit crunch. Banks have tightened lending standards because of a heightened default risk, providing less credit to consumers.

State by state: Delinquency rates were highest in Nevada, at 2.44%; Florida, with 1.9%; and Arizona, 1.68%.

Rates were lowest in North Dakota, at 0.73%; South Dakota, at 0.77%; and Alaska, at 0.77%.

Alaska has the highest average bankcard debt, at $7,476, while the lowest is West Virginia with $4,640.

Outlook: TransUnion said it expects the 90-day delinquency rate will continue rising, nearing 1.7% by the end of 2009.

Depending on the effects of stimulus programs and unemployment, the rate's upward climb could hit a peak in late 2010 or early 2011, the report said.

TransUnion expects Nevada will have the highest delinquency rate by the end of 2009, at 2.95%, while Alaska will have the lowest at 0.96%.

But outside influences could have unforeseen effects, the report cautioned.

"The impact the changes to credit card regulations and associated legislation, and the response of card lenders to those changes, will have on consumer behavior and hence delinquency rates is still unknown," the report said. To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
Top luxurious hotel suites for business travelers For many people, you can't put a price on comfort. More
Million-dollar startups: These firms scored big sales their first year Their first year in business, these companies generated $1 million in sales. More
The 10 best states for retirees It might be worth moving to a new place to find your dream retirement home. Check out these 10 states. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play