Consumer and Mortgage Loan Delinquencies Fell in May 2012 Part 2

This is Part 2 of the June 2012 release by Equifax of their May National Consumer Credit Trends Report. This report included mortgages, home equity loans, student loans, bankcards, and auto loans. Part 1 discussed mortgages, home equity loans and student loans.  Part 2 discusses bankcards and auto loans.

Both auto and bankcard delinquency rates declined in May 2012.  From May 2012 to February 2012, bankcard roll rate (the rate at which consumers progress from the “current” stage in payments to 30-days past due) remained below 1 percent, which was the first time it remained low in five years. Auto delinquency rates in May 2012 were the lowest of all major loan types, which was a five-year low and was at pre-recession levels.

Bankcard

From May 2010 to May 2012, bankcard balance write-off rates declined by more than half (from 11% to less than 5 percent).

Bankcard balance write-off rates in May 2012 were below 5 percent, compared to 11 percent in 2010, which was a decrease of 55 percent.

Bankcard balances were $530 billion in May 2012, compared to $730 billion in January 2009, which was the peak. This was a decrease of 28 percent.

Total bankcard credit limits were $2.4 trillion for the seventh consecutive month, which was approximately 6.6 percent higher than the lowest point set in February 2011.

Auto loans

New auto finance company loans opened between January and March 2012 totaled $52.5 billion, compared to $26.9 billion year-to-date March 2009, which was a 49 percent increase. This March 2009 number was a recession low.

New auto bank loans amounts opened between January and March 2012 totaled $47.5 billion, compared to $35.9 billion in March 2010, or an increase of 25 percent. The March 2010 amount was the recession low and the March 2012 amount was a seven-year high.

The total number of outstanding auto loans surpassed 57 billion in May 2012, which was the first time since February 2010.

Total number of new auto loan loans was 5.2 million year-to-date March 2012, which was the second highest in seven years. The peak was 5.3 million reached year-to-date March 2007.

Auto loan amounts were $100 billion year-to-date March 2012, which was a six year high.

Total existing auto loan balances were $740 billion in May 2012, an increase of $43.1 billion from the same time a year ago. This was the highest in 34 months.

The number of new auto loans funded by auto finance companies was 1.06 million year-to-date March 2012, compared to the recession year-to-date low of 577,900 in March 2009 or an increase of 46 percent.  This was a five-year high.

The number of new auto loans funded by banks, savings and loans or credit unions totaled 933,900 year-to-date March 2012, compared to 741,000 year-to-date March 2012, an increase of 21 percent. This was seven-year high.

This study shows that more consumers are paying down bankcard balances and paying on time. On the other hand, consumers are buying more cars than in the past four years.  This could be due to pent up demand for cars, loosening of credit standards and low interest rates.

Credit Expert Witness, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.

Categorised in: Auto Loans, Credit Cards, Debt, Financial, Getting Credit, Money & Identity

This post was written by John Ulzheimer