Credit trends heading in wrong direction

Delinquency rates in Target’s credit card portfolio are still really good, but after several years of steady improvement, a slight deterioration has become evident the past few months.

In November, 3.3% of accounts were three or more payments past due, the same rate as the prior month but slightly higher than the low of 3% seen during September, August and July. Likewise, accounts with four or more payments past due stood at 2.2% in November, the same as in October, but higher than the 2.1% seen the prior four months.

The slight uptrend isn’t a cause for concern just yet. But it does make you wonder if REDcard holders excited about the prospect of saving 5% made liberal use of their cards this past summer, and as bills came due realized they had overextended themselves. However, even at the slightly higher rates reported in November, Target’s delinquency rates are roughly half what they were two years ago at this time.