More Target shoppers honoring their obligations

Credit card trends at Target hit a new high, or low, depending on one’s perspective. Either way, it’s a good thing.

Monthly data regarding delinquency rates in Target’s credit card portfolio show the number of accounts 60 and 90 days past due sunk to three years lows in April. The number of accounts with three or more payments past due sank to 2.7% in April, continuing a downward trend from prior months earlier this year when the rate was 2.9% in March and 3.2% in February. This measure of tardiness hit a high of 6.1% in February 2010. The number of accounts with four or more payments past due sank to 1.9% of receivables, compared with 2.1% the prior month and less than half the 4.5% peak of February 2010.

The improvement is good news on a number of levels. It means Target is less likely to incur losses in future periods when those who are past due don’t pay their bills and Target is forced to write off the balance. On a big picture, more philosophical level it is encouraging to see a higher percentage of credit customers honoring their obligations, regardless of whether that is the result of more responsible use of credit or Target’s decision a few years back to tighten up its credit standards.