The rate at which consumers allowed their credit card debt to be passed on to collections by their lenders after repeated failure to pay their bills fell once again in August.
The national credit card default rate slipped inAugust to a rate of 5.26 percent of all balances, down significantly from July's rate of 5.64 percent, according to the latest monthly statistics released jointly by S&P Indices and the credit monitoring firm Experian. That rate is also down considerably on a year-over-year basis, as credit card defaults stood at 7.87 percent of all balances in August 2010.
Meanwhile, consumers also had a better time getting out of debt problems for other loan types in August as well, the report said. The composite default rate for all types of credit slipped to 2.04 percent, down slightly from July's 2.06 percent, but significantly from August 2010's rate of 3.32 percent.
Some experts caution that while credit card defaults have fallen considerably over the last year, increased rates of spending in recent months might lead to an increase as cash-strapped consumers struggle to pay higher bills.