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Late payment drop shows impact of credit reforms

By EILEEN AJ CONNELLY, AP Personal Finance Writer

NEW YORK – Consumers struggling to pay their bills in the first few months of the year got an immediate benefit from credit card reforms.

Late credit card payments fell sharply in the first quarter, and at least part of the drop can be attributed to the law that kicked in Feb. 22 curbing interest rate hikes and various fees.

The rate of borrowers who fell 90 days or more behind on their cards dropped to 1.11 percent for the first quarter, down from 1.32 percent in the 2009 period, according to credit reporting agency TransUnion. The delinquency rate was also down from the fourth-quarter of 2009, when it stood at 1.21 percent.

The rate hovered between .50 and .75 percent before the recession, and was at its highest in the first quarter of 2009.

Average credit card debt also fell in the first quarter, to $5,165. That's down 10.6 percent from $5,776 at the start of last year.

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