Bank Card Default Rate Rises for a Fifth Straight Month, S&P/Experian Report

Consumer bank card defaults rose for a fifth straight month in March, according to data from S&P Dow Jones Indices and credit bureau Experian.

The bank card default rate recorded a 3.31% default rate, up nine basis points from February.

Auto loan defaults came in at 1.00%, down five basis points from the previous month. The first mortgage default rate came in at 0.75%, up one basis point from February and reaching a one-year high.

The five major cities showed mixed results in March with two higher and three lower default rates. New York had the largest increase, reporting 1.09%, up 15 basis points from February.

Chicago reported 1.05% for March, rising six basis points from the previous month. Miami came in at 1.40%, down two basis points from February.

Dallas reported a decrease of four basis points at 0.79%. Los Angeles saw its first default rate decrease since September 2016, down five basis points at 0.75%.

The national bank card default rate of 3.31% in March sets a 45-month high.

When comparing the bank card default rate among the four census divisions, the bank card default rate in the South is considerably higher than the other three census divisions.

Upon further analysis to the South’s three census regions, East South Central – comprised of Kentucky, Tennessee, Alabama, and Mississippi – has the highest bank card default rate.

What does this mean to you? If this default rate continues to rise, it will mean greater difficulty obtaining credit and higher interest rates on cards.

However, there’s no reason for panic: competition is fierce among card issuers and these default rates are still quite low.

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