Credit card delinquencies fall to 8-year low

credit_cards.gi.top.jpgIleana Garcia looks in her wallet for credit cards she wants to melt over a hot plate at the Miami Vineyard Community Church on March 7, 2009 in Kendall, Fla. By Annalyn Censky, staff reporter


NEW YORK (CNNMoney.com) -- Americans are not as far behind on their bills as a year ago.

The number of consumers behind on their credit card payments fell to an eight-year low in the first quarter of 2010, the American Bankers Association said Wednesday. Overall, delinquencies across a wide-range of consumer debt categories have also fallen.

High unemployment and plummeting home values during the financial meltdown appear to have spurred consumers to shore up their finances and banks to limit their lending, resulting in fewer Americans being late with payments, the industry group said.

About 3.88% of bank credit card accounts were past due by 30 days or more in the first quarter of the year -- the first time since 2002 that the rate has fallen below 4%, the ABA said Wednesday.

And ABA's composite ratio, which tracks delinquencies across eight key categories, fell to 2.98% from 3.19% the previous quarter -- a sign of modest improvement in the U.S. economy, the group said.

"Consumers are doing a much better job managing their finances, building their savings and spending and borrowing less," ABA Chief Economist James Chessen said.

The ABA's report confirms what other government studies have shown: Americans appear to be taking a more prudent approach to their finances.

The Commerce Department's most recent reports on personal spending and income showed consumers stashed a higher portion of their earnings into savings in May than they did a month earlier.

But while Americans may be more careful with their money, that doesn't mean the economy is a bed of roses.

Unemployment, at 9.5%, is still high 9.5%. There was a loss of 125,000 jobs in June. That was the first month of job losses in a year. And that doesn't include the record-high 1.21 million so-called "discouraged workers" who want to work, but aren't even looking because of the weak labor market.

Because consumer debt delinquencies are directly related to job losses and income trends, the ABA's second quarter report is likely to reflect the slower economic growth, Chessen said. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 18,162.99 121.45 0.67%
Nasdaq 5,106.59 73.84 1.47%
S&P 500 2,123.48 19.28 0.92%
Treasuries 2.13 -0.00 -0.05%
Data as of 9:07am ET
Company Price Change % Change
AbbVie Inc 67.38 1.28 1.94%
Lorillard Inc 72.16 0.66 0.91%
Cisco Systems Inc 29.31 0.36 1.24%
Qualcomm Inc 71.02 1.66 2.39%
Comcast Corp 59.34 0.75 1.28%
Data as of May 27
Sponsors

Sections

Workers with college and graduate school degrees saw their wages fall the most last year. The least educated saw a slight bump in pay. More

Karlos Dansby, a linebacker with the Cleveland Browns, is bringing his winning strategy from the football field into the startup arena. More

Wealthy millennial women are more likely to make at least as much -- if not more -- than their husbands, and are more likely to be the dominant decision-makers on household finances and investments, according to a new report. More