Credit card delinquencies spike in first quarter

In addition to the massive pullback in credit spending, this industry has even more troubles. The industry lobbied hard to implement their dream plan and they got it. Congress is always ready and willing to pitch in for a cause as long as the campaign dollars come in. That this is the end result of bad policy is no surprise. That the Democrats have failed to do enough to stand up for consumers and bankruptcies is another. Have the banks properly padded their accounts to prepare for such a fall?

The delinquency rate jumped to 1.32 percent this year, from 1.19 percent in the first three months of 2008, TransUnion said. The statistic measures the percentage of card holders who are three months or more past due on their payments for cards bearing MasterCard and Visa logos, along with American Express and Discover cards.

The average total debt on bank cards also rose, jumping to $5,776 from $5,548 last year.

Balances typically rise in the first quarter, as holiday spending comes due, said Ezra Becker, director of consulting and strategy in TransUnion's financial services group. But retail sales results showed holiday spending took a steep drop. That likely means higher balances now reflect consumers using credit cards to pay for necessities, he said.

"You would have seen a much better retail season if people were spending on gifts," Becker noted.

The story has a lot of interesting analysis of what this all means in terms of spending and employment compensation. Until the next quarter figures are in there are bound to be questions but in a few months, more trends will be more obvious and easier to understand where we are in this recession cycle.