Credit Card Delinquencies Fall, Other Delinquencies Hold Steady

Delinquencies for credit cards provided by banks fell significantly in the first quarter of 2019, while the composite index of closed-end loans remained unchanged, according to the American Bankers Association’s Consumer Credit Delinquency Bulletin released today. The composite ratio, which tracks delinquencies in eight closed-end installment loan categories (direct and indirect auto, home equity, marine, mobile home, personal, property improvement and RV loans) held steady at 1.78% of all accounts, well below the pre-recession average of 2.09%.

“The benefits of a strong job market and rising wages continue to be reflected in relatively low credit delinquencies,” said ABA Chief Economist James Chessen. “The current economic expansion that has endured for 10 years has provided a solid foundation for consumers who continue to do a good job of managing their finances.”

Delinquencies fell in five of the 11 categories tracked by ABA, while five categories rose and one remained unchanged. Among the open-ended loan types tracked, bankcard delinquencies fell 18 basis points to 3.04% of all accounts, reversing an increase from the previous quarter and remaining well below the pre-recession average of 4.33%. Meanwhile, non-card revolving loan delinquencies fell from 1.7% of all accounts to 1.66%. Delinquencies on home equity lines of credit rose slightly from 1.09% to 1.1%.

“Banks continually adjust their underwriting standards to account for any potential headwinds, and consumers continue to do a solid job of managing their debts and spending within their means,” Chessen noted. “It’s the right combination that keeps delinquencies at low levels.”