Bank Card Delinquencies Increased To 4.51 Percent In First 3 Months Of 2008

July 3, 2008 10:10 a.m. EST

Washington, D.C. (AHN) - Home equity credit line delinquencies hit an 11-year high in the first three months of 2008, the American Bankers Association said.

The increase in delinquencies was the result of a combination of several factors such as declining home equity and stock values, unemployment, soaring food, fuel and energy bills and slow income growth. As a result Americans struggled which bills to give priority, if there were funds left from the dwindling value of their paycheck.

ABA said bank card delinquencies went up to 4.51 percent in the first quarter of the year, up by 0.13 percent from the previous quarter. ABA also noticed an increase in late payments on credit cards. The number of card accounts overdue by 30 days grew to 3.11 percent in the first quarter compared to 3.04 percent in the 4th quarter of 2007.

James Chessen, chief economist of the ABA, said "The tax stimulus is helping to boost personal income, but persistently high gas and food prices will eat away at overall resources."

He added, "The delinquency rates are still high enough to warrant concern, and banks will no doubt continue the pattern of tighter lending standards for higher-risk customers."