Record High For Overdue Payments Delinquency Ratio Highest Since Tracking Started In 1974

Americans increasingly are having trouble shouldering the debt they have accumulated over the last three years.

The American Bankers Association reported Tuesday that credit card delinquencies reached a record 3.66 percent during the April-June quarter, up from 3.53 percent during the previous three months.

The ratio was the highest since the ABA began tracking payments overdue for 30 or more days in 1974. The data was adjusted for seasonal variations.

The increase came despite banks’ attempts to tighten loan standards in recent months.

“The delinquencies being seen today are the result of lending decisions made by banks 18 to 24 months ago,” explained James Chessen, the ABA’s chief economist.

The Federal Deposit Insurance Corp. reported last week that banks suffered $3.8 billion in losses on credit card and consumer loans in the second quarter, up 36 percent from the same period last year.

But Fed Governor Lawrence Lindsey assured Congress last week that credit card debt and soaring personal bankruptcies so far are not threatening the economy or the banks.

In addition to credit card delinquencies, the ABA survey found 2.32 percent of eight types of closed-end installment loans were past due in the second quarter, up from 2.14 percent in the January-March quarter.

A year earlier, these loans, which include auto loans, had a 1.95 delinquency rate.

The lowest delinquency rate was reported on open-end home equity lines of credit, which stood at 0.84 percent, up slightly from 0.82 percent three months earlier.

Closed-end home equity late payments declined from 1.44 percent to 1.25 percent.