Consumer Credit: Are You Paying Your Bills On Time?

By SNW Asset Management via

Every month we get a fresh update on the consumer master trust credit card data – monthly average delinquencies and net charge-offs, or as we like to call it, the “Are you paying your bills on time?” report.

The short answer is yes, consumers across America are paying their bills on time and there are few defaults. We are not terribly surprised by these great numbers, as the unemployment rate has been falling since the beginning of 2010 and we are currently in one of the longest economic recoveries on record. Data should be looking very good!

While the data is looking good, there is more to the story. Charge-offs and delinquencies bottomed out sometime in 2015 and since then have shown no real improvement. So if the numbers are not going to get any getter, the best we can hope for is stability and in the worst case some widening.

A very close look at the numbers shows some slight weakening in delinquencies, which is normally a precursor to charge-offs. It may be that these higher delinquencies have resulted from aggressive marketing tactics by credit card issuers.

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