Prime Rate Credit

In what seems like a slight oxymoron, credit card payment delinquencies (credit card payments that are pretty late in other words, usually over one month and into several months late) were on the decline for June and home equity loan delinquencies were on the rise for a one and a half year high according to financial reports. Home equity loans are loans that people take out against the value, or equity of their homes, in order to pay bills, make home improvements, and do whatever else it is they need to have liquid cash available for.

But people are making their payments late now more than they have in over one and a half years on the home equity loans, creating the oxymoron between credit cards being at a low right now for delinquencies. I doubt the two are related, or it would be very hard to prove that they are, but it does seem ironic that the lesser of the two “evils” when it comes to credit securing is actually the one that is at a high and not the revolving debt one. It is becoming increasingly publicized that having bad credit can ruin your chances of getting good apr’s on loans and other financial instruments including mortgages.

Payments for home equity loans are considered delinquent in this report if they are more than 30 days past due, so this is actually kind of a stringent number if you ask me, especially since a lot of home equity loans and mortgage loans will offer a grace period without any fees that extends beyond (sometimes well beyond) this 30 day threshold.

And, the good news is that credit card delinquencies are way down, by roughly 4% which is considerable. Maybe people are realizing that if they don’t make their payments on time, the outrageous late fees might just not be worth it. Also, I think people are more aware of their credit cards and the fact that the revolving debt, even if you have a low apr credit card or special credit cards for bad credit, is detrimental to your financial well being if left unpaid, or the minimums are always paid.