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U.S. consumers are making more timely monthly payments on their credit card accounts. Unfortunately, credit card debt is also increasing at a potentially alarming rate. The reasons for cardholders’ more regular monthly payments are also troubling, but understandable.

As more mortgage loan balances, when compared to home values, endure “under water” conditions (mortgage balances higher than a home’s fair market value), consumers are now paying their credit cards before they make their mortgage payments. This may be a recipe for increased Chapter 13 and Chapter 7 bankruptcy filings in Miami and around the U.S.

One of the three major credit reporting agencies, Trans Union, reports that the rate of payments for 90-day delinquent accounts in the first quarter of 2012 was 0.73 percent, down from 0.78 in the fourth quarter of 2011 and 0.74 in the first quarter of 2011. Delinquency rates have consistently decreased since the recession took firm hold in 2007.

Card issuers, pleased with this renewed consumer payment diligence, are granting many new plastic card accounts to borrowers with lower credit scores. Trans Union, using data from random samples from around 27 million credit reports, published this interesting information.

Unlike most prior historical periods, credit card debt did not decline in the first quarter of 2012. Typically, consumers pay down debt created during the previous quarters’ holiday shopping season. However, in 2012, credit card balances increased by 6.1 percent, as compared to first quarter of 2011. The average credit card debt for all consumers in Trans Union’s database in the first quarter of 2012 was $4,962.

The consumer trend of reducing credit card debt recorded from 2009 through 2011, fueled by the layoffs and employer downsizing during the recession, has reversed. Consumer confidence in the economy has increased, obviously. However, increasing credit card balances, unsecured loans, may forecast higher bankruptcy filings in the future.

Do you find this increasing credit card debt troubling? Do you believe it forecasts more bankruptcies?

Source: Associated Press, “Pace of new credit card accounts picked up in 1Q,” Alex Veiga, May 15, 2012