Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

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

Index Last Change % Change
Dow 17,650.51 240.79 1.38%
Nasdaq 4,773.41 81.54 1.74%
S&P 500 2,067.22 31.13 1.53%
Treasuries 1.47 0.01 0.34%
Data as of 12:31pm ET
Company Price Change % Change
Bank of America Corp... 13.12 0.43 3.35%
Southwestern Energy ... 13.12 -0.77 -5.51%
Alcoa Inc 9.15 -0.18 -1.93%
Micron Technology In... 13.27 0.28 2.16%
Nike Inc 54.20 1.11 2.10%
Data as of 12:16pm ET
Sponsors

Sections

The strong showing for text messaging tech firm Twilio shows investors are willing to bet on risky IPOs again after Square's flop last year. Next up? Asian social media giant Line. Will other big unicorns like Uber and Airbnb follow? More

Investors are already sifting through the Brexit market rubble for opportunities. Morgan Stanley compiled a list of highly-rated stocks that have limited or no direct exposure to the situation in the U.K. More

Facebook is changing News Feed to prioritize posts from users' friends over material shared by publishers. It's also sharing its "values" for the first time. More

The coveted British passport is losing its luster following Britain's decision to leave the European Union. Instead, Ireland has seen a surge in passport applications. More