Bank card default rate rising, according to credit default indices

The S&P/Experian Consumer Credit Default Indices revealed the bank card default rate rose 16 basis points to 3.44 percent through December 2017.

Officials said the indices represent a comprehensive measure of changes in consumer credit defaults and show the composite rate increased two basis points from last month to 0.91 percent.

The analysis also determined the auto loan default rate fell one basis point from November to 1.10 percent and the first mortgage default rate increased two basis points to 0.68 percent.

“The default rate on bank cards has been rising consistently since December 2015,” David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, said. “Defaults on auto loans are up slightly and first mortgage defaults are little changed over the last two to three years. Continued low unemployment and low inflation, rising home prices and stock market gains combined with gains in consumer confidence to support strong gains in retail sales in the last four months of 2017.”

The indices are constructed to track the default experience of consumer balances in four key loan categories: auto, bankcard, first mortgage lien, and second mortgage lien.

The indices are calculated based on data extracted from Experian’s consumer credit database, which is populated with individual consumer loan and payment data submitted by lenders to Experian every month.