Americans cranked up their use of credit cards in the third quarter, racking up more debt than a year ago, while also being less diligent about making payments on time, an analysis of consumer-credit data shows. The average credit card debt per borrower in the US grew 4.9% in the July-to-September period from a year earlier to $4,996, credit reporting agency TransUnion said today. At the same time, the rate of credit card payments at least 90 days overdue hit 0.75%, up from 0.71% in the third quarter of last year, the firm said.
One likely contributor to the rise in card balances: Banks have been issuing more cards to borrowers, including those with less-than-sterling credit. In Q2 of this year, the number of new cards issued by banks rose 3.1% from a year earlier, with more than a quarter of the cards going to consumers with a nonprime credit score, according to the VantageScore credit scale. A nonprime score is anything below a 700 on the scale, which ranges from 990 to 501. The lower the score, the more of a credit risk a borrower represents to banks. (Read more credit cards stories.)