Credit Card Delinquencies Hit Record
The American Bankers Association (ABA) has a new report out showing that a record percentage of credit card accounts were delinquent in the second quarter of this year. The ABA reports that between April and June 2005, a total of 4.81% of credit card accounts were past due by 30 days or more. That was an increase of 0.05% from the first quarter where delinquencies sat at 4.76% and had been the previous record. The ABA began keeping track of delinquencies in 1973.
In addition to an increase in credit card delinquencies, there was also an increase in delinquent payments on personal loans, auto loans, home equity loans and lines of credit the ABA reported.
The ABA put the blame of the increased delinquencies on higher fuel prices, noting that the cost of filling up a mid-sized car had risen more than $7 since the beginning of the year. The average cost of filling up a mid-size car at the beginning of the year was $30.63, it had risen to$38.33 in June.
Experts predict a further increase in delinquent payments on credit cards in the quarters ahead. Gas prices have further increased since June and the average cost to fill up a mid-sized car today is $47.78. The second quarter numbers also don't reflect any effect from Hurricanes Katrina and Rita.
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