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Consumer Bank Card Delinquencies Are Lowest Since 1994, ABA Says

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Jan. 3 (Bloomberg) -- U.S. bank-card delinquencies fell to the lowest level in 18 years as consumers strengthened their personal finances amid uncertainty over the nation’s economy, the American Bankers Association said in a quarterly report.

Bank-card accounts at least 30 days overdue dropped to 2.75 percent of all accounts in the third quarter from 2.93 percent in the second quarter, the ABA said today in its Consumer Credit Delinquency Bulletin. The rate, the lowest since 1994, was below the 15-year average of 3.89 percent, the ABA said in a statement.

ABA Chief Economist James Chessen said the improvement in bank-card delinquencies reflects consumers’ efforts to better manage their finances. He said it was a bright spot in a report that failed to show improvement across eight installment-loan categories tracked by the Washington-based industry group.

“The lack of broad-based improvement remains a cause for concern,” Chessen said in the statement. “Some categories have reached historical lows leaving little room for improvement. In addition, slow job growth, continued uncertainty and falling consumer confidence could signal rising delinquencies in the year ahead.”

Delinquencies in two home-related loan categories rose in the third quarter, Chessen said.

“While there are strong signs that the housing market has turned a corner, it will take several quarters before delinquency numbers begin to reflect those trends,” he said.

To contact the reporter on this story: Gregory Mott in Washington at gmott1@bloomberg.net

To contact the editor responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net

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