Consumer credit delinquency rates to continue decline in 2010

Fewer  consumers are falling behind on their credit payments Consumers dealing with credit card debt counseling will continue to make strides to eliminate any debts they owe to creditors in 2010, as delinquency rates will drop for the third consecutive year, according to TransUnion.

According to annual credit forecasts released on Tuesday, 2010 credit card delinquency rates are expected to decline by 2.8 percent, or 0.03 percentage points, to 1.04 percent.

"The decrease is projected to be smaller than in previous years, indicating that this might be the best consumers can do in managing delinquencies in the current economic environment," said Ezra Becker, the director of consulting and strategy for TransUnion’s financial services group. "It will be interesting to see how the CARD Act, primarily taking effect in February 2010, will impact both consumer and lenders."

The projected decline would put the credit card delinquency rate at the end of 2010 0.32 percentage points below its 1.36 percent rate recorded two years earlier. It would also be a much smaller year-over-year decrease than the 11.6 and 11 percent declines seen in the two previous years respectively.

Becker added that the 2010 decline would be caused primarily by smarter financial decisions from consumers. He said that rates would decline as cardholders keep their current debt to a minimum while working "aggressively" to pay off what they already owe.