Americans pay down debt, reduce delinquencies

Americans pay down debt, reduce delinquenciesNew data from major credit bureau TransUnion shows that more Americans are paying down their credit card debt, which is generally considered by analysts to be a good sign of the country's economic future.

The rate of delinquent payments in the first quarter of 2011 fell to 0.74 percent, a 33 percent decrease from 2010's 1.11 percent. Delinquent payments are defined as payments missing after more than 90 days, so this essentially means that fewer borrowers are missing payments on their credit cards.

The numbers for the first quarter actually represent the lowest point in 15 years, with only the third quarter of 1996 providing a lower rate of delinquency. It also marks a quick turnaround from the worst parts of the recession, specifically the first quarter of 2009, when delinquent payments reached a high of 1.32 percent.

In addition to fewer delinquent payments, buyers are carrying smaller balances on their credit cards. The current nationwide average sits at $4,679, which is also a historic low dating back to 2000.

Hopefully, this healthy financial activity leads to increased credit scores for many consumers. Higher credit scores ultimately lead to lower interest rates and the ability to qualify for better car loans and mortgages.