Credit Card Industry Ensnared in Delinquency
Credit cards delinquencies overall remained near record levels, according to the American Bankers Association.
The ABA's most recent Consumer Credit Delinquency Bulletin reported that bank card delinquencies rose 23 basis points to 4.75% of all accounts, compared to 4.52% in the previous quarter. The ABA reported that the record was 4.81% in the second quarter of 2005.
The balances on those delinquent accounts rose 108 basis points to 6.60% of the value of all outstanding bank card debt, marking a new record, the ABA reported.
The ABA placed responsibility for all loan delinquency continuing unemployment.
"The number one driver of delinquencies is job loss," said ABA Chief Economist James Chessen . "When people lose their jobs, they can't pay their bills. Delinquencies won't improve until companies start hiring again and we see a significant economic turnaround," Chessen said, adding that job growth is not likely to improve in the foreseeable future. "However, many people are taking greater control of their finances by cutting spending, lowering debt and saving more money."