Consumer delinquencies declined significantly in last year’s third quarter as the economy improved and consumers better managed their finances, according to results from the American Bankers Association’s Consumer Credit Delinquency Bulletin.

The composite ratio, which tracks delinquencies in eight closed-end installment loan categories, fell 13 basis points to 1.63 percent of all accounts in the third quarter, a record low that’s well under the 15-year average of 2.35 percent. (See Historical Graphic.) The ABA report defines a delinquency as a late payment that is 30 days or more overdue.

“More jobs and higher income are a recipe for lower delinquencies,” said James Chessen, ABA’s chief economist. “Consumers also continue to do a good job of monitoring their finances and keeping debt at manageable levels.”

Bank card delinquencies saw a slight third-quarter increase, rising 13 basis points to 2.55 percent of all accounts – but still remain well below their 15-year average of 3.84 percent.

“While bank card delinquencies saw a slight uptick, rates are still more than 30 percent below their 15-year average,” Chessen said.  “It will be difficult for bank card delinquencies to improve further when they are already at such low levels.”

Chessen noted that delinquencies in two home-related loan categories – home equity loans and home equity lines of credit – fell sharply in the third quarter as home prices increased.

“Rising home prices have relieved some of the pressure on home equity loans and home equity lines of credit,” Chessen said. “This is another sign of a housing sector recovery as people find it easier to sell or refinance their homes.”

Chessen believes that small fluctuations in delinquency rates are likely in the months ahead as the economy continues to improve.

“Delinquencies are likely to remain at reasonably low levels for the next several quarters as the economy continues to improve and jobs and income continue to grow,” Chessen said. “At the same time, consumers can’t afford to be complacent when it comes to keeping debt levels under control.”

The third quarter 2013 composite ratio is made up of the following eight closed-end loans. All figures are seasonally adjusted based upon the number of accounts.

Closed-End Loans

  • Personal loan delinquencies fell from 1.94 percent to 1.51 percent.

  • Direct auto loan delinquencies held steady at 0.88 percent.

  • Indirect auto loan delinquencies fell from 1.72 percent to 1.64 percent.

  • Mobile home delinquencies fell from 3.96 percent to 3.64 percent.

  • RV loan delinquencies fell from 1.20 percent to 1.14 percent.

  • Marine loan delinquencies fell from 1.55 percent to 1.36 percent.

  • Property improvement loan delinquencies rose from 0.80 percent to 1.25 percent.

  • Home equity loan delinquencies fell from 3.83 percent to 3.58 percent.

Open-End Loans

  • Bank card delinquencies rose from 2.42 percent to 2.55 percent.

  • Home equity lines of credit delinquencies fell from 1.90 percent to 1.71 percent.

  • Non-card revolving loan delinquencies rose from 1.58 percent to 1.84 percent.

The American Bankers Association represents banks of all sizes and charters and is the voice for the nation’s $14 trillion banking industry and its two million employees. Learn more at

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