Late Credit Card Payments Continue Fall January 21st, 2008
Credit card delinquencies continued to fall during the third quarter of 2007, according to the American Bankers Association’s Consumer Credit Delinquency Bulletin.
Late payments on credit cards fell 21 basis points to 4.18 percent of accounts in the third quarter (seasonally adjusted).
“Credit card holders continued to improve on-time payments during the third quarter despite obvious stress in the housing market,” said James Chessen, ABA chief economist. “Modest income and job growth helped ease consumers’ financial stress even as they worried how to pay for the rising costs of gas, food and energy.”
The fact that credit card repayment rates continue to improve as mortgage repayments worsen may seem contrary to conventional wisdom, Chessen said.
“Consumers facing mortgage resets may be under financial pressure, but they still want to keep up with other payments,” Chessen said. “They still need to heat their homes, put food on the table and fill their cars with gas.”
“Consumer loans directly related to the housing market were hit the hardest,” Chessen said. “We anticipate delinquency rates will continue to rise on these types of loans in the fourth quarter of 2007 reflecting continued weakness in the housing sector.”The ABA also released a number of other key findings:
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