Bank Card Delinquencies Drop To Lowest Levels Since 2002

Posted by Meredith Dwyer on August 6 2010 @ 5:03 pm

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Credit card delinquencies drop to an eight-year low, signaling economic improvement Despite high unemployment rates and record foreclosure and mortgage defaults, Americans are working hard to pay down debt, as evidenced by a recent report.

According to the Mortgage Bankers Association, the Consumer Credit Delinquency Bulletin - which tracks eight closed-end installment loan categories - declined from 3.19 percent in the previous quarter to 2.98 percent currently, marking a drop of 21 basis points.

Bank card delinquencies also declined one-half basis point to 3.88 percent. The current rate is the first time since 2002 that the delinquency figures have fallen below 4 percent. Upon noting that the home equity delinquency rate fell from 4.32 percent last quarter to its current 4.12 percent - the lowest level in two years - the ABA expressed that the housing market may be slowly stabilizing.

"It's clear that consumer balance sheets are improving. People are borrowing less, saving more and building wealth. These are all positive signs," ABA chief economist James Chessen said.

Although Americans appear to be improving their finances, many facing bankruptcy or foreclosure are still seeking some form of debt relief. Credit counseling has been encouraged by many experts as a way to build a budget and explore repayment options.

Timely articles written by the Editors at DRC

New government regulations in place for consumers in need of debt relief for credit cards and other unsecured debts.

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