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Fewer Late Credit Card Payments Reported

January 11, 2006
Late payments on credit card loans declined in the third quarter of 2005, according to the American Bankers Association’s Consumer Credit Delinquency Bulletin. The number of credit card accounts 30 days or more past due decreased to 4.74 percent from the record high of 4.81 percent in the second quarter of 2005.

"The fall in delinquencies was a welcome change, but signs of financial stress still are present," said James Chessen, ABA’s chief economist. "The persistent interest rate increases by the Federal Reserve and record high gas prices in the third quarter provided a one-two punch that continued to inflict pain on personal budgets."

"Continued strong economic growth and falling gas prices in the fourth quarter leaves me hopeful that delinquencies will continue to fall -- however the full impact of hurricane Katrina has yet to be felt," Chessen said, adding that any effects from the 2005 hurricane season storms will likely be spread across the fourth quarter of 2005 and the first quarter of 2006.

ABA advises consumers to review their finances every year. For those who are having trouble paying down their debts, ABA offers the following tips.

Warning signs of being overextended on credit:
• Paying only the minimum payment month after month;
• Being out of cash constantly;
• Being late on important payments, such as rent or mortgage;
• Taking longer and longer to pay off balances; and
• Borrowing from one lender to pay another.

Solving debt problems:
• Talk with creditors — hiding only makes the problem worse;
• Don’t charge more purchases until your problems are solved;
• Avoid bankruptcy — it’s a short-term solution with long-term consequences; and
• Contact Consumer Credit Counseling Services at 800-388-2227.

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