|
CREDIT CARD LOAN DELINQUENCIES
REACH RECORD HIGH IN SECOND QUARTER 2005
WASHINGTON, Sept. 28 – Credit card loan delinquencies reached a record high of 4.81 percent of accounts in the second quarter of this year, according to the American Bankers Association’s Consumer Credit Delinquency Bulletin.
In calculating these results, ABA incorporated revised information on the first quarter delinquency rates. As a result, the credit card loan delinquency ratio for the first quarter was revised upward to 4.76 percent of accounts from the previously reported 4.03 percent.
"The last two quarters have not been pretty," said James Chessen, ABA’s chief economist. "Gas prices are taking huge chunks out of wallets, leaving some individuals with little left to meet their financial obligations,” he said. “With gas prices still rising, the third quarter is not likely to be any better.”
The composite ratio of closed-end installment loans increased to 2.22 percent from 2.03* percent of all accounts (seasonally adjusted), and not 1.89 percent as previously reported.
The composite ratio tracks eight types of consumer loans:
Personal loan delinquencies rose to 1.94 percent from 1.83 percent. Direct auto loans rose to 2.07 percent from 2.04 percent. Indirect auto loans rose to 2.08 percent from 1.87 percent. Recreational vehicle loan delinquencies rose to 0.87 percent from 0.85 percent. Marine loan delinquencies rose to 1.05 percent from .97 percent. Home equity loan delinquencies rose to 2.75 from 2.61* percent. Property improvement loan delinquencies fell to 1.52 percent from 2.01 percent. Mobile home loan delinquencies fell to 3.74 percent from 4.46 percent.
*Editor’s Note: Numbers reflect revised data from the first quarter.
Additionally, past-due payments on home equity lines of credit— the lowest delinquency rate category —increased to 0.43 percent from 0.40 percent.
The ABA advises consumers to review their finances every year. ABA offers the following tips for consumers who might be having trouble paying down their debts.
Warning signs of being overextended on credit:
Paying only the minimum payment month after month; Being out of cash constantly; Being late on important payments, such as rent or mortgage; Taking longer and longer to pay off balances; and Borrowing from one lender to pay another.
Solving debt problems:
Talk with creditors—hiding only makes the problem worse; Don’t charge more purchases until your problems are solved; Avoid bankruptcy—it’s a short-term solution with long-term consequences; and Contact Consumer Credit Counseling Services at 800-388-2227.
|