ABA Says Card Delinquencies See Little Change

Credit card delinquencies fell slightly in the second quarter to 4.39 percent of all accounts, compared with 4.41 percent in the first quarter, according to the American Bankers Association’s Consumer Credit Delinquency Bulletin today. The ABA defines delinquencies as accounts that are 30 days or more overdue.

The credit card delinquency rate was 4.41 percent in the second quarter of 2006.

Home equity credit line delinquency rates rose in the second quarter to 0.77 percent from 0.60 percent in the first quarter.

The fall in card delinquencies and rise in home loan delinquencies is counter to historic patterns where consumers typically were sure to pay their mortgage. James Chessen, the ABA chief economist notes in a statement that the shift may be driven by resets of adjustable rate mortgages.

“Not surprisingly, customers may feel helpless when faced with a mortgage reset they can’t afford, but they still want to keep up their other payments,” said Chessen. “People need to pay for gas … so they can get to work.”

The ABA composite loan delinquency ratio dropped to 2.27 percent from 2.42 percent in the first quarter. However, the composite ratio is up 31 basis points, or nearly 16 percent, from 1.96 percent in the second quarter a year ago.

The composite delinquency rate includes eight closed-end installment loan categories – home equity, property improvement, indirect auto, direct auto, personal, mobile home, marine, and recreational vehicle.