Consumers continue to fall behind on their credit payments, due largely to overdue payments on auto loans.

Delinquencies in the fourth quarter of 2007 reached their highest levels since 1992, according to the American Bankers Associations Consumer Credit Delinquency Bulletin. The composite ratio, which tracks eight closed-end installment loan categories, rose 21 basis points to 2.65 percent of all accounts in the fourth quarter (seasonally adjusted).

All eight loan categories experienced increased delinquencies during the fourth quarter, a rare occurrence. The ABA report defines delinquency as late payments that are 30 days or more overdue.

James Chessen, ABA chief economist, attributed the rise largely to auto loan delinquencies. The auto loan category comprises about two-thirds of all closed-end consumer installment loans. In addition, the number of delinquent bankcard accounts rose to 4.38 percent, but remains close to the five-year average of 4.40 percent.

The rise in consumer credit delinquencies is consistent with a rapidly slowing economy, Chessen said. Stress in the housing market still dominates the story but its a broader tale of an overall weak economy.

The weak housing market continues to be reflected in rising delinquency rates for home equity loans and lines of credit. Delinquencies for home equity lines of credit -- the lowest delinquency rate category -- rose to 0.96 percent.

The fourth quarter composite ratio is made up of the following closed-end loans. All figures are seasonally adjusted based upon the number of accounts.
• Home equity loan delinquencies increased to 2.39 percent from 2.28 percent.
• Property improvement loan delinquencies increased to 1.81 percent from 1.60 percent.
• Indirect auto loan delinquencies increased to 3.13 percent from 2.86 percent.
• Direct auto loan delinquencies increased to 1.90 percent from 1.81 percent.
• Personal loan delinquencies increased to 2.48 percent from 2.29 percent.
• Mobile home loan delinquencies increased to 2.92 percent from 2.87 percent.
• Marine loan delinquencies increased to 1.57 percent from 1.30 percent.
• Recreational vehicle loan delinquencies increased to 1.08 percent from 0.89 percent.

No relief

Chessen predicted that delinquencies will continue to rise during the first half of 2008.

No relief for consumers is in sight as food and gas prices remain stubbornly high and income growth is anemic, Chessen said.

Chessen recommends that borrowers experiencing financial stress seek out their lenders promptly as more options are likely to be available when the problem is addressed early.

ABA advises consumers to review their finances often and watch for the warning signs of overextended 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.

For others having trouble paying down debts, ABA advises taking action -- sooner rather than later -- by following these tips:
• Talk with creditors -- hiding only makes the problem worse;
• Dont charge more purchases until your problems are solved;
• Contact Consumer Credit Counseling Services at 1-800-388-2777.