Washington, DC, Jan. 7--The percentage of customers who were late on their credit card bills hit a record high in the third quarter of 2003, according to the American Bankers Association.
But the size of those bills was well below the record.
A seasonally-adjusted 4.09% of credit card accounts were past due in the third quarter, up from 4.04% in the second quarter and from 4% a year earlier.
As a percentage of total dollars outstanding, rather than number of accounts, the third-quarter credit card delinquency rate reached an unadjusted 4.66%, well below the record of 5.45% set in 1996 but up from 4.51% in the second quarter and 4.45% a year earlier.
Credit card delinquencies are likely to stay high until the job market improves, said ABA chief economist James Chessen. The third quarter's rapid economic growth could be a sign that improvement is around the corner, but many households are still struggling, he said.
"The job market has been flying against strong headwinds, lengthening the time between jobs and intensifying financial stress," Chessen said.
Delinquency rates also rose for direct auto loans and home equity loans. But fewer indirect auto loans, personal loans and home equity lines of credit were past due.
The ABA's composite delinquency ratio of nonrevolving loans--such as auto and home equity loans--fell to 2.14% of all loans in the third quarter from 2.18% the quarter before. But the percentage was up from 2.06% notched in 2002.
Home equity lines continued to be the category with the lowest past-due rate, falling to 0.52% from 0.63% in the second quarter. Delinquencies on home equity loans jumped to 2.52% in the third quarter from 2.48% in the second quarter, while the past-due rate for mobile home loans increased to 6% from 5.98%.
Direct auto loan delinquencies rose to 2.46% in the third quarter from 2.41% in the second quarter. But for indirect auto loans, delinquencies dropped to 1.80% in the third quarter from 1.86% in the second quarter.
