Banks, Consumers See Card Stats Improve - TheStreet

Banks, Consumers See Card Stats Improve

While delinquencies and losses have abated, and consumers have eased their reliance on plastic, the hardest-hit regional economies are still struggling with credit-card debt.
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) -- When it comes to recent credit-card statistics, everything is relative, as they say.

On Wednesday, a consumer advocacy group that collects U.S. credit-card data said that, broadly speaking, things have gotten better for consumers and banks alike. Credit-card borrowers deleveraged in May to the tune of 1%, with an average plastic balance of $7,652 -- the lowest level in 2010. Credit scores remained stable, and bank charge-offs of credit-card debt continued to plunge.

Consumers in the San Francisco area have done particularly well, paying down 14% of their credit-card balances -- one of the most expensive kinds of debt to hold -- over the past year.

"The rate of charge-offs seems to have peaked in December 2009 and January 2010," said Ken Lin, CEO of Credit Karma, the advocacy group. "This is consistent with the conventional wisdom that credit card charge-offs are highly correlated with the unemployment rate which also peaked in Q4 2009."

On the flip side, though, credit-card debt is still up 8% over the past year, overall. San Francisco was just one of two metropolitan areas that paid down those bills, the other being New York City -- little surprise, given the level of wealth and relative economic stability in both regions.

At the other end of the Golden State, in San Diego, consumers saw credit scores decline by an average of five points, the biggest drop in the country. And just across the New York borders, Pennsylvania residents faced a 25% increase in credit-card debt, while New Jerseyans added 14% more debt to their tabs.

Recent trends in monthly master-trust reports from the big six plastic lenders --

Bank of America

(BAC) - Get Report


JPMorgan Chase

(JPM) - Get Report



(C) - Get Report


Capital One

(COF) - Get Report


American Express

(AXP) - Get Report



(DFS) - Get Report

-- have shown that losses have finally abated, and delinquency trends are improving. From the consumer perspective, laws that were recently implemented will also better protect them against sudden interest rate spikes and allow them to be better informed about what kind of debt they're getting into.

Still, while the dark days of credit-card debt appear to be over in broad terms, the hardest-hit economies in terms of jobs -- industrial cities, the Sun Belt and the West -- aren't yet out of the woods.

-- Written by Lauren Tara LaCapra in New York