Credit card spending could rise as more consumers move out of subprime score levels

Consumer credit reports have been trending upward for months now, which is certainly a positive sign for debt collection agencies. Meanwhile, a recent Equifax study indicated that more good news is on the way, with approximately 1 million consumers dropping out of subprime credit range.

"Consumer credit scores are improving in most major metropolitan areas," said Trey Loughran, president of the Personal Solutions division at Equifax. "The job market is improving and time is starting to heal the wounds of the Great Recession. We are seeing a trend of consumers being careful and disciplined about their use of existing credit while also being cautious about using new accounts they have opened."

According to the report, 2.1 percent of consumers dropped below the subprime credit score level of 620 in the third quarter of 2012 compared to the same time frame in 2011. On an even more positive note, 24 of the 25 metro areas that Equifax tracked experienced declines in subprime credit levels, with Houston being the only exception. 

American consumer credit has been on a steady climb the past two years, with recent statistics by the Federal Reserve finding that November marked the fourth straight month of significant increases, according to Bloomberg. While car and student loans drove a substantial portion of that increase, credit card spending continued to bounce back from its low point during the recession. The report found that revolving debt in the United States - the sector that includes credit cards - rose $817 million from October to November, following a more than $3.4 billion jump the prior month. 

With so many more Americans falling below the subprime credit score levels, 2013 could see another growth spurt with regard to credit card spending. Many experts have projected the sector to increase again in January.