Q2 Credit Card Delinquencies Rise Up Slightly

Credit card delinquencies rose just three basis points during the second quarter ended June 30, to 4.54% of total loans from 4.51% in the previous quarter, according to a report by the American Bankers Association. The credit card delinquency rate was 4.39% for the second quarter of 2007. The association's report defines delinquencies as payments that are 30 days past due. The federal economic stimulus payments earlier this year likely are the reason for just a slight increase in the delinquency rate, according to James Chessen, the ABA association's chief economist. "Having that financial shot in the arm appears to have helped some Americans pay off debt during the second quarter of 2008," Chessen says of the report's findings. "Borrowers are also being more cautious in adding to their overall debt, which is prudent in the face of a slowing economy," he adds. The composite ratio, which tracks eight closed-end installment-loan categories, such as credit card, auto and home-equity loans, rose six basis points, to 2.68% in the second quarter from 2.62% in the first previous quarter. The association attributes that increase largely to home-equity loan delinquencies, which jumped 22 basis points, to 2.56% from 2.34%.