Bank Credit Card Delinquencies Hit 18-Year Low

Bank Credit Card Delinquencies Hit 18-Year Low

The delinquency rate on credit cards issued by banks fell to an 18-year low, according to the latest data found in the American Bankers Association Consumer Credit Delinquency Bulletin.

Data for the third quarter of 2012 shows that delinquent bank card accounts, defined as accounts that are at least 30 days overdue, declined to 2.75 percent. This is down from 2.93 percent in the second quarter, and significantly below the 15-year average of 3.89 percent.

This drop in delinquency rates could change due to the recent expiration of the payroll tax cuts.

"Many consumers will see their real disposable income take a significant hit in the New Year," said James Chessen, the ABA's chief economist. "Changes in payroll withholding will decrease disposable income, reducing retail sales and making it more difficult for some people to meet their financial obligations."

Here are the changes in delinquency rates for some other types of loans:

  • Delinquencies on home equity lines of credit rose from 1.91 percent in the second quarter to 1.93 percent in the third quarter.
  • Non-card revolving loan delinquencies fell from 1.35 percent to 1.28 percent.
  • Personal loan delinquencies fell from 2.15 percent to 2.14 percent.
  • Direct auto loan delinquencies rose from 0.92 percent to 0.95 percent.
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