Americans opened new credit card accounts at an increased rate during the second quarter of 2012.  The balances on those cards however remained near historic lows as did delinquency rates on credit card debt.

TransUnion reported this morning that the national credit card delinquency rate which is the ratio of borrowers who are 90 days past due, dropped to 0.63 percent, down 10 basis points from the first quarter rate.  The rate has been lower on only two occasions; in Q2 2011 it hit its lowest level of 0.60 percent and in the fourth quarter of 1994 the rate was 0.61 percent.

New cards were originated at a 4 percent higher rate than in the second quarter of 2011 while the share of cards to new non-prime higher-risk customers (those with a VantageScore® under 700 on a scale of 501-990) fell slightly from 27 percent of originations a year ago to 26.1 percent, still much higher than the 20.6% noted in the second quarter of 2010. 

With the availability of new credit, the average credit card debt increased over the past year from $4,699 in the second quarter of 2011 to $4,971 in the most recent period, but this is low by historic standards.  In the second quarter of 2009 the average credit card debt was $5,719.

"The national credit card delinquency rate continues to remain at the lowest levels we've observed in 18 years," said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit. "It's a positive situation because average borrower balances have increased over the past year as new card originations have grown. These low delinquency rates reflect both continued conservatism in lender underwriting and the ongoing prioritization of card payments among consumers."

"While non-prime borrowers made up a slightly smaller percentage of all new trades in this latest quarter, they continue to gain more access to credit. In conjunction with the growth in the overall number of card originations in the last few years, it means that the credit card pie is bigger, and non-prime consumers are getting a bigger slice of that pie," said Becker. "This is important to note, because one would think delinquencies would rise as non-prime borrowers gain more access to credit. We've found that consumers continue to value their credit cards more than ever and will likely do so at least until unemployment abates."

On a state level the delinquency rate rose in five states with the highest increases in Massachusetts (+39.22 percent), Mississippi (+29.33 percent) which also had the highest delinquency rate at 0.97 percent, and West Virginia (+28.13 percent).  Other states with high rates were Nevada and Alabama at 0.89 and 0.84 percent respectively.  The lowest delinquency rates were in the neighboring states of North and South Dakota and Montana where the rates ranged from 36 to 43 percent.

Based on current economic assumptions, TransUnion is maintaining previous forecasts for credit card delinquencies to remain near current levels, with potentially some seasonal fluctuations, through the end of 2012. This forecast is based on seasonality effects and various other economic factors such as anticipated gross state product, consumer sentiment, disposable income, and employment conditions.