Credit quality measures continue to rapidly improve, indicating that U. S. consumers are still acting cautiously, according to the latest Credit Card Index results from Fitch Ratings.
“U.S. consumers are charging less and swiftly paying off existing balances in increasing numbers,” Fitch managing director Michael Dean said. “Default rates are also pulling back more quickly than anticipated and appear poised for further improvements in the coming months.”
The survey showed that credit card defaults are back in line with historical averages and registered their second largest monthly decline in over 10 years.
Prime card monthly payment rates and late stage delinquencies improved, as well as yield, while three month average excess spreads dropped during the June collection period.
Consumer spending, however, dropped in June and marked its first decline in two years. The survey showed that consumer spending had a marginal 0.1 percent increase in the second quarter as a whole, clearly reflecting the weakened condition of the economy.
During a Washington Post interview in June, Sen. Jeff Sessions (R-Ala.) said the nation’s debt causes declines in consumer spending.
”The debt is subtly pulling down the economy and producing fear and uncertainty,” Sessions said, according to the Washington Post. “The numbers are not good. Consumer confidence is not good. Consumer spending is not good.”