Late payments of credit card bills fell in the second quarter to their lowest point since 1994, according to the American Bankers Association's bulletin on consumer loan delinquencies.

Economists say the drop is a strong sign of U.S. consumers' financial health.

The number of credit card bills paid late - by 30 days or more - represented 2.99% of all accounts, down from 3.28% in the first quarter and from 3.33% in the second quarter last year. The figure reached its lowest point since the fourth quarter of 1994, when delinquencies represented 2.93% of credit card accounts.

Dollars outstanding on delinquent accounts represented 3.88% of total card debt, down from 3.94% in the first quarter and 4.1% in the second quarter last year. The figure is the lowest since the second quarter of 1995, when it was 3.58%.

"Individuals are meeting their obligations, particularly on credit cards," said James Chessen, the ABA's chief economist.

However, late payments rose in other lending categories. The ABA's composite percentage of delinquencies on closed-end installment loans reached 2.3%, up from 2.14% in the first quarter and 2.09% a year earlier.

The composite tracks eight types of loans, including personal and auto, and late payments rose in seven of them.

The percentage of dollars delinquent was 1.73%, up from 1.55% in the first quarter and 1.6% in the second quarter last year.

Mr. Chessen said the decline in credit card delinquencies and the rise in closed-end delinquencies show that consumers are starting to feel the effects of the Federal Reserve's interest rate increases since June 1999. "These two things are moving in opposite directions. This led us to believe there was some impact [of interest rate hikes] on the margins."

While the closed-end figures were not alarmingly high, "the fact that they went up in seven out of eight categories is something to pay attention to as a possible warning," Mr. Chessen said.

Randall Dodd, director of the Derivatives Study Center at the Economic Strategy Institute in Washington, said that unemployment presents a bigger risk to consumer credit than interest rates.

"The most important impact may come indirectly through the dampening of the economy," he said. When Fed chairman Alan Greenspan "really slows the economy, and the rate of job growth declines, then that's when people will get into trouble."

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