ABA: Credit Card Delinquencies Fall, Other Loans Not So Lucky

Credit card delinquencies dropped in the third quarter of 2007, the American Bankers Association reported yesterday in its Consumer Credit Delinquency Bulletin. It is the fourth straight quarter that the percentage of total credit card accounts late by 30 or more days has decreased.

In the third quarter, 4.18 percent of credit card accounts were at least 30 days past due, compared to 4.39 percent in the second quarter. But the percentage of total dollars that were delinquent on credit cards increased to 4 percent in the quarter, up from 3.73 percent in the second quarter, marking the highest percentage of total dollars past due since the fourth quarter of 2004.

“Credit card holders continued to improve on-time payments during the third quarter despite obvious stress in the housing market,” said James Chessen, ABA chief economist in a release. “Modest income and job growth helped ease consumers’ financial stress even as they worried how to pay for the rising costs of gas, food, and energy.”

The ABA’s Bulletin is based on a quarterly survey of consumer credit delinquency ratios at commercial banks.

Most other loan types did not fare as well in the ABA’s survey.

The number of delinquent accounts in the composite ratio, which tracks eight closed-end installment loan categories, increased to 2.44 percent in the third quarter from 2.27 percent in the second quarter. The composite ratio includes home equity loans, auto loans, personal loans, and other specialty loan types. Both direct and indirect auto loan delinquencies increased, with the direct loan delinquency rate increasing 7.1 percent and indirect loans rising 3.25 percent.

Home equity lines of credit, which like credit cards is tracked separately, saw delinquencies creep from 0.77 percent in the second quarter to 0.84 percent in the third quarter.