Credit Card Delinquencies Remain Low Thanks to Cheaper Gas Prices

January 13, 2015, Written By Bill Hardekopf
Low Gas Prices At The Pump

The shockingly low gas prices are giving Americans more disposable income now than they have had in years. This is doing wonders to help consumers pay back their loans in a timely manner.

According to a recent survey from the American Bankers Association, the percentage of bank card accounts that are delinquent remained far below the 15-year average. The credit card delinquencies increased slightly from 2.43% to 2.51% in the third quarter of 2014 following two consecutive quarters of decreases. But the 2.51% is well below the 15-year average of 3.77%.

A delinquency is any payment that is at least 30 days past due.

“Bank card delinquencies have hovered near 15-year lows with only minor fluctuations over the past two years, and we expect that trend to continue,” said James Chessen, ABA’s chief economist. “While people are clearly ready to spend again as economic activity picks up, the overwhelming majority of consumers continue to keep debt at manageable levels.”

Bank card delinquencies have varied by only 14 basis points since the fourth quarter of 2012.

Overall delinquencies are down in seven of the 11 loan categories tracked by the ABA. Only 1.51% of ABA-tracked credit accounts were at least 30 days delinquent for the third quarter of 2014, compared to a 15-year average of 2.35%. This is the lowest level the ABA has reported since it started tracking accounts in 1974, which proves just how much of an impact these low gas prices are having on the economy.

“Lower gas prices helped free up resources for everything from new purchases to debt repayment,” said Chessen. “Every one-cent decline in pump prices puts about $1 billion back into consumers’ pockets, which means their paychecks are going much further.”



The information contained within this article was accurate as of January 13, 2015. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.