Credit Card Delinquencies on the Rise, ABA Finds
WASHINGTON - Delinquencies improved across most consumer loan categories except credit cards and home equity loans, the American Bankers Association's Consumer Credit Delinquency Bulletin reported.
"Overall the financial picture is good, which is reflected in improved delinquencies in most consumer loan categories," ABA Chief Economist James Chessen said. The composite ratio, which tracks late payments in eight types of closed-end installment loans, fell to 1.94% from 2.02% of accounts (seasonally adjusted) at the end of 2005.
Credit cards on the other hand increased to 4.40% at the start of 2006 from 4.27% the previous quarter.
The bulletin is a quarterly survey of more than 300 banks nationwide reporting on the percentage of consumer loans that are 30 days or more past due.
"Credit card loan payments are sensitive to financial pressures," Chessen explained. "As gas prices eased at the end of 2005, so did credit card late payments. But the favorable gas-price effect evaporated during the first quarter of 2006 and it's no wonder why. The Federal Reserve continues to raise interest rates and high energy prices are taking a bite out of disposable income." He also noted the negative savings rate.
Additionally, past-due payments on home equity lines of credit-the lowest delinquency rate category-increased from 0.51% to 0.55%, the fifth consecutive quarterly increase.
Here's how other consumer debts fared in the first quarter:
* Personal loan delinquencies dipped to 1.81% from 1.97%.
* Direct auto loan delinquencies rose to 1.78% from 1.72%.
* Indirect auto loan delinquencies fell to 2.04% from 2.13%.
* Recreational vehicle loan delinquencies dropped to 0.78% from 0.90%
* Marine loan delinquencies decreased to 0.94% from 1.01%.
* Home equity loan delinquencies fell to 1.94% from 2.07 %.
* Property improvement loan delinquencies increased to 1.42% from 1.36%.
* Mobile home loan delinquencies dropped to 3.37% from 3.91%.