Consumers more timely with credit card payments

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The number of past-due credit card accounts fell slightly, ending a one-year trend of rising delinquency rates, according to the American Bankers Association Consumer Credit Delinquency Bulletin released Sept. 25.|ret||ret||tab|

Credit-card delinquencies dropped slightly to 4.04 percent of accounts (seasonally adjusted) in the second quarter of 2003 from the record high of 4.07 percent reported in the first quarter of 2003. Based on total dollars outstanding, bank-card delinquencies remain at 4.51 percent (not seasonally adjusted), which is almost 1 percentage point below the record level of 5.45 percent set in the fourth quarter of 1996. |ret||ret||tab|

"Low interest rates coupled with record mortgage (refinances) cushioned the impact of a soft job market and kept delinquencies in check," said James Chessen, ABA's chief economist. "Until job losses become job gains, significant improvements in delinquency rates are unlikely." |ret||ret||tab|

The average length of unemployment rose to almost 20 weeks at the close of the second quarter, according to the Bureau of Labor Statistics. Manufacturing jobs lost over the last two years reached 2.5 million. |ret||ret||tab|

The composite ratio of closed-end installment loans 30 days or more past due rose to 2.18 percent of all accounts (seasonally adjusted) from 2.12 percent, the highest it has been since the fourth quarter of 2001, when the ratio reached 2.34 percent. The composite ratio tracks eight closed-end consumer installment loans, including personal, auto and home equity. The increase was driven by a rise in late payments on home equity loans and indirect auto loans. |ret||ret||tab|

Home equity loan delinquencies rose to 2.48 percent from 2.02 percent, based on the number of accounts. Even though past-due payments for home equity lines also increased to 0.63 percent from 0.61 percent, this category continues to carry the lowest delinquency rate. |ret||ret||tab|

Delinquencies on indirect auto loans increased to 1.86 percent in the first quarter from 1.79 percent, while direct auto loan delinquencies remained at 2.41 percent. Based on dollars outstanding, the ratio increased for indirect auto loans, from 1.38 percent to 1.54 percent, and dropped in the direct auto loan category, from 2 percent to 1.95 percent. |ret||ret||tab|

Personal loan delinquencies rose to 3.17 percent in the second quarter of 2003 from 3.13 percent in the previous quarter. Mobile home loan delinquencies dropped from 6.16 percent in the first quarter of 2003 to 5.98 percent in the second quarter of 2003. |ret||ret||tab|

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. |ret||ret||tab|

Warning signs of being overextended: |ret||ret||tab|

paying only the minimum payment month after month; |ret||ret||tab|

being constantly out of cash; |ret||ret||tab|

being late on important payments, such as rent or mortgage; |ret||ret||tab|

taking longer and longer to pay off balances; and |ret||ret||tab|

borrowing from one lender to pay another. |ret||ret||tab|

Ways to solve debt problems include: |ret||ret||tab|

talk with creditors hiding only makes the problem worse; |ret||ret||tab|

don't charge more purchases until your problems are solved; |ret||ret||tab|

avoid bankruptcy it's a short-term solution with long-term consequences; and|ret||ret||tab|

contact Consumer Credit Counseling Services at 800-388-2227. |ret||ret||tab|

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