Bank Credit Card Delinquencies Fall to 2002 Level, ABA Says

Bank-issued credit card delinquencies dipped slightly in the first quarter of 2010 – the first time such late payments have fallen below 4 percent since the second quarter of 2002, according to the American Bankers Association.

Overall, the ABA’s first-quarter report showed consumer loan delinquencies improved for a third consecutive quarter. The ABA defines a delinquency as a late payment that is 30 days or more overdue.

The ABA’s composite ratio, which tracks delinquencies in eight closed-end installment loan categories, fell 21 basis points to 2.98 percent of all accounts, from 3.19 percent of all accounts in the previous quarter.

Bank card delinquencies fell more than half of one percent to 3.88 percent of all accounts which is below the 15-year average (3.93 percent). 

Home equity loan delinquencies fell for the first time in two years to 4.12 percent of all accounts, from 4.32 percent in the previous quarter. 

ABA Chief Economist James Chessen said the improvements are a result of consumers shoring up heir finances. 

“The overall risk in banks’ consumer loan portfolios is improving and will continue to do so,” Chessen said.  “Banks are putting losses behind them and following a prudent approach to new loans because the on-again, off-again economy is keeping risk high.”

Here is the ABA’s first-quarter, composite ratio results by category:

Closed-End Loans:

Decreased Delinquencies:

• Direct auto loan delinquencies fell from 1.94 percent to 1.79 percent.
• Indirect auto loan delinquencies fell from 3.15 percent to 3.03 percent.
• Home equity loan delinquencies fell from 4.32 percent to 4.12 percent.
• Personal loan delinquencies fell from 3.63 percent 3.61 percent.
• Property improvement loan delinquencies fell from 1.63 percent to 1.40 percent.   

Increased Delinquencies:

• Marine loan delinquencies rose from 1.63 percent to 1.93 percent.
• Mobile home loan delinquencies rose from 3.41 percent to 3.65 percent.
• RV loan delinquencies rose from 1.44 percent to 1.58 percent.     

Opened-End Loans:

Decreased Delinquencies:

• Home equity lines of credit delinquencies fell from 2.04 percent to 1.81 percent.
• Bank card delinquencies fell from 4.39 percent to 3.88 percent.

 Increased Delinquencies:

• Non-card revolving loan delinquencies increased from 1.46 percent to 1.63 percent.