Credit card and receiptsThe job market has been steadily improving since the recession ended, but did you know the credit card delinquency rate has also been steadily dropping? The delinquency rate calculates the number of loans past due by a month or more measured as a percentage of all loans.

The delinquency rate reached an all-time high during the recession, coming in at nearly 7%. However, it’s been on a steady decline every year since 2010, and in the second quarter of 2014 reached an all-time low of 2.3%.

As you might imagine, credit card delinquencies tend to happen most when an unexpected financial hardship occurs, for example losing a job or experiencing a medical emergency. It’s not surprise, then, that delinquencies spiked during the recession, when millions of Americans found themselves out of work. Now that people are finding themselves on more stable employment ground, delinquencies once again are dropping.

However, this doesn’t explain why the delinquency rate has continued to drop so steadily. Before the recession, the job market was doing well and the delinquency rate was low, around 4% in 2006. But our rate is even lower today, and the job market in comparison is probably not quite as strong as it was around 2006.

This might be explained by Americans reducing their amount of personal debt. At the beginning of the recession, the average American credit card balance was around $3,500. By the end of the recession, that average balance was down to $2,800. Lower debt levels to begin with means lower delinquency rates.