Credit-card delinquencies tumble

Delinquencies on credit cards are at their lowest level in 17 years, credit tracker TransUnion says.

The Chicago company said in a report Tuesday that card companies charging off soured accounts as noncollectable contributed to the trend along with consumers taking a more conservative approach to using plastic to pay for goods and services.

Overall, consumers' non-real estate debt has fallen 9.5% from its peak in the fourth quarter of 2008 to $2.28 trillion, the Federal Reserve Bank of New York said this week in its quarterly report on household debt.

But the decline has slowed to a near standstill, and credit card debt limits and the number of accounts rose slightly.

The big question is whether that is more than a temporary pause in the spend-less, save-more trend. The answer could have big consequences for the economy.

"During the next few quarters we will gain a better understanding of whether this is a permanent or temporary break in the decline of total outstanding consumer debt," a research vice president at the New York Fed said.

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--E. Scott Reckard

Photo: Decline in consumer credit has slowed -- for now -- a Fed study says. Credit: Lawrence K. Ho / Los Angeles Times