Credit card delinquencies declined slightly in the fourth quarter to their lowest point in nearly two years, according to the American Bankers Association's quarterly survey of late payments on consumer loans.

The survey, which is viewed as a barometer of consumer credit quality, also found that 2.27% of all accounts - a composite measure of eight types of closed-end loans, excluding credit cards - were 30 days or more past due. That was up from 2.14% the quarter before but down from 2.35% a year earlier.

The best news was in the credit card sector. In its report, released Wednesday, the ABA said 3.22% of credit card accounts were at least 30 days delinquent on Dec. 31, compared with 3.35% in the previous quarter and 3.45% a year earlier.

Economists attributed the credit card results not only to a strong economy and higher wages, but also to a more precarious trend: a surge in home equity borrowing.

"For the first time in a very long time, it looks like the good economy is finally improving consumer balance sheets," said Diane Swonk, chief economist at Bank One Corp. in Chicago. "But there is some concern out there that consumers are using their home equity lines to pay down their credit lines, which is just a restructuring of debt."

Some evidence of this may lie in the slight increase in delinquencies on home equity loans, which rose to 1.29% in the fourth quarter - versus 1.28% three months earlier and 1.24% in the fourth quarter of 1998.

James Chessen, chief economist for the ABA in Washington, said delinquencies in closed-end loans were driven up by auto loan delinquencies, which make up about half the lending composite index. Direct auto loan late payments rose from 1.89% in the third quarter to 2.07% in the fourth, up a notch from 2.06% a year earlier.

"It's clear to me that auto delinquencies tend to jump around a lot, and I do worry that it's easy to get pulled into the beauty of a new car and then realize four years later that it's been a struggle to afford it," Mr. Chessen said.

Overall, Mr. Chessen said he was cheered by the fourth-quarter numbers, which are "certainly going in the right direction in the face of the Fed's rate increases."

A report on the credit card industry released this month by Fitch IBCA, the New York rating agency that tracks chargeoffs in securitized portfolios, was similarly positive.

"Despite four short-term interest rate increases since last summer, even the remotest signs of any credit deterioration remain absent," Michael R. Dean, an analyst at Fitch, wrote in the report.

Fitch's delinquency index, which measures outstanding balances past due by more than 60 days, dropped to 3.06% in February from 3.17% a month earlier and a nine-month high of 3.26% in December.

Gary Schlossberg, senior economist at Wells Capital Management, a subsidiary of Wells Fargo & Co., said that even though delinquencies are relatively low, banks have become more conservative in their lending criteria.

The portion of banks willing to increase their lending to households dropped from 14.5% last June to 3.9% in February, according to the Fed's loan officer survey, which polls 60 banks.

"We're already seeing a step-up in borrowing, which raises the possibility that credit quality will begin to erode again," Mr. Schlossberg said. "The percentage of banks willing to increase their lending to households has come way down."

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