The Joplin Globe, Joplin, MO

Business

July 3, 2012

Overdue bills on credit cards, consumer debt, drop to 2007 level

WASHINGTON — The portion of consumers with payments overdue on credit cards, auto loans and other debt dropped in the first three months of the year to the lowest level since 2007, according to the American Bankers Association.

Overall, the percentage of consumer loans that were at least 30 days overdue dropped to 2.35 percent in the January-through-March period, down from 2.49 percent in the last quarter of 2011. It was the best performance since the second quarter of 2007, and put consumer delinquencies below the 15-year average of 2.4 percent, the group said.

At the worst point during the Great Recession and its aftermath, about 3.35 percent of consumer loans were overdue.

“Consumers have done a remarkable job getting their finances under control,” said James Chessen, chief economist for the ABA. “Overall debt levels have declined dramatically, and savings continue to grow. This means many consumers have more capacity to absorb a financial shock, and that’s a good place to be.”

The group’s quarterly Consumer Credit Delinquency Bulletin tracks overdue payments in 11 categories. Ten of those categories showed improvements in the first quarter, which Chessen said was remarkable given the sharp increase in gas prices in the first three months of the year.

Consumers showed great improvement on credit card debt. The percentage of overdue credit card payments fell to 3.08 percent in the first quarter from 3.17 percent. It was the lowest level since 2001. In mid-2009, about 5 percent of all credit card accounts were delinquent.

Delinquencies rose only in home equity lines of credit, to 1.78 percent of all accounts from 1.69 percent in the previous quarter. Chessen attributed the increase to the continued fallout from the housing crisis.

“It will be many quarters before delinquencies on home equity loans get back to anything close to normal,” he said.

Chessen expects delinquency rates to continue to drop, but not as dramatically as in the past two quarters.

“We’ve moved back to historical norms now and further improvement could be hard to achieve,” he said. “The economy has slowed recently and uncertainty remains high.”

 

1
Text Only
Business
Poll

A Missouri Senate committee has endorsed a 1-cent sales tax increase to fund transportation projects. The proposed constitutional amendment passed the House earlier this month. If passed by the full Senate, the measure would head to the November ballot for voter approval. Would you vote in favor of it?

Yes.
No.
     View Results
Facebook
Twitter Updates
Follow us on twitter
NDN Video
Captain of Sunken SKorean Ferry Arrested Raw: Fire Destroys 3 N.J. Beachfront Homes Raw: Pope Presides Over Good Friday Mass Raw: Space X Launches to Space Station Superheroes Descend on Capitol Mall Man Charged in Kansas City Highway Shootings Obama Awards Navy Football Trophy Anti-semitic Leaflets Posted in Eastern Ukraine Raw: Magnitude-7.2 Earthquake Shakes Mexico City Ceremony at MIT Remembers One of Boston's Finest Raw: Students Hurt in Colo. School Bus Crash Raw: Church Tries for Record With Chalk Jesus Raw: Faithful Celebrate Good Friday Worldwide Deadly Avalanche Sweeps Slopes of Mount Everest Police Arrest Suspect in Highway Shootings Drought Concerns May Hurt Lake Tourism Vermont Goat Meat Gives Refugees Taste of Home Calif. Investigators Re-construct Fatal Bus Cras Mayor Rob Ford Launches Re-election Campaign Appellate Court Hears Okla. Gay Marriage Case