In a positive sign for American households and the American economy, consumers paid their credit card balances on-time in the third quarter of 2020.
According to a new report from the American Bankers Association, consumer credit delinquencies had skyrocketed during the onset of the pandemic to 2.62% but, plummeted in the second quarter of 2020 and stayed low at 1.53% in the third quarter. Delinquencies occur when a consumer falls behind in a payment by 30 days or more.
Stimulus checks along with adjustments in spending habits helped Americans to better meet their debt obligations.
“We’ve seen continued improvement in delinquencies for most loan categories following the sharp increase when the pandemic first gripped our nation at the beginning of last year,” said ABA Senior Economist Rob Strand in a statement from the association. “Consumers have remained cautious about spending amid economic uncertainty and have leveraged their stimulus payments to help ensure they meet their obligations.”