In another sign that consumers' financial health is recovering, the American Bankers Association reported the second consecutive quarterly decline in delinquencies. However, analysts warned the improvement could level off in coming quarters.

The trade group said Wednesday that the ratio of delinquencies to total accounts in eight loan categories, including auto and personal loans, fell 4 basis points from the third quarter, to 3.19%. The ABA defines delinquencies as loans 30 days or more past due.

The delinquency rate on credit card accounts dropped 38 basis points, to 4.39%, which is below the five-year average of 4.52%. Delinquencies on home equity lines of credit fell for the first time since the second quarter of 2008, to 2.04% from 2.12%.

"I don't think there's any doubt we're in an improving credit cycle today," said John Stilmar, an analyst at SunTrust Robinson Humphrey.

The improvement in the ABA indexes is consistent with what major lenders have recently reported. Discover Financial Services, for example, said last month that delinquencies on its credit cards declined for a fifth month in a row in February.

The continued decline in delinquencies is a good sign because they are a leading indicator of future chargeoffs, said Sanjay Sakhrani, an analyst at KBW Inc.'s Keefe, Bruyette & Woods Inc.

"You could actually see a leveling off if not the beginning of a decline in chargeoffs," in the second quarter, Sakhrani said.

Mark Luschini, chief investment strategist at Janney Montgomery Scott, noted several macroeconomic changes that are helping consumers pay their bills on time.

"Because of some improvement in the stock market, some order being brought to the job market and stabilization coming to the housing market, that's enabling the consumer to right their ship and be more current on their credit activity," he said.

It's also a reflection of the stricter underwriting standards that lenders have adopted, Stilmar said. "Only people with good credit are getting credit," while "you're burning off some of those more credit-challenged borrowers" who got loans when standards were looser.

Most analysts agreed that the improvement should continue through the first half of this year, as consumers use their tax rebates to pay down debt. But beyond that the outlook is uncertain, considering that the unemployment rate stands at 9.7%.

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