While the percentage of credit card accounts that are delinquent has been declining for the past year, credit card delinquencies, based on total dollars outstanding, is reaching highs not seen in more than three years. Even though the stats are somewhat skewed by inactive accounts, the bottom line is that Americans are slipping on making timely payments on their credit accounts. According to the American Bankers Association’s “Consumer Credit Delinquency Bulletin,” delinquencies based on total dollars outstanding for 3Q/07 were 4.00%, compared to 3.73% in the second quarter and 3.50% for 3Q/06. Based on the number of accounts past-due, the figures were 4.18% for 3Q/07, 4.39% for 2Q/07, and 4.57% one-year ago. The ABA says that it anticipates delinquency rates will continue to rise in the fourth due to continued weakness in the housing sector. Capital One recently reported that charge-offs for its U.S. Card business spiked at 4.75% for October, the highest level since February 2004.
3Q CREDIT CARD DELINQUENCY HISTORY
(based on total dollars outstanding)
Source: ABA Delinquency Bulletin