Credit cards are among the financial instruments analysts look at when estimating the strength of the economy. By looking at these rates, it is easy to say that the economy is starting to look a lot better. Past due credit card payments have fallen to 0.57%. This is the lowest point this has been since 1994. Even the delinquency rate, a normally much higher level, has been declining from 0.69% in the first three months of the year to 0.63% the last three months.
Every section of credit card debt is in decline to show people are being more responsible with their debt decisions. This is in keeping with the decline in bankruptcy rates that have been reported recently. People are carrying lower balances as a result of going to credit counseling during a bankruptcy, or by knowing others who have been through a bankruptcy. No one wants to risk losing their credit cards or their credit behind being late.
The employment rate may have something to do with the ability to pay credit card bills as well. This is because the employment rates have risen with 192,000 new jobs added this month and more expected to follow. The unemployment level is at a 4.5 year low at 7.4% in July, which is down from 7.6% in June. Keep in mind that a healthy economy has a 5-6% unemployment rate, so the economy is not yet at what many would consider to be healthy.
There has also been a rise in new credit cards issued. This is a good sign that more borrowers have the credit worthiness to qualify to get the credit cards. It is also a good sign that there is the possibility that more people will be able to make better decisions with these new credit cards.