WASHINGTON - Late payments on consumer loans climbed last summer to their highest point since the last recession, in 2001.
The American Bankers Association reported yesterday that the delinquency rate on a composite of consumer loans increased to 2.44 percent in the July-September quarter, up from 2.27 percent in the previous quarter.
Payments are considered delinquent if they are 30 or more days past due. The survey is based on information supplied by more than 300 banks.
The delinquency rate on credit cards, however, dropped to 4.18 percent in the third quarter, down from 4.39 percent in the second.
The association's quarterly survey painted a mixed picture of how people are managing debt. It suggested that some people felt more squeezed than others.
A severe housing slump and weaker home values have clobbered some homeowners - making it difficult, or even impossible, for some to pay their monthly mortgages. Foreclosures surged to record highs.
"Consumer loans directly related to the housing market were hit the hardest," said James Chessen, the association's chief economist. "We anticipate delinquency rates will continue to rise on these types of loans in the fourth quarter of 2007."
Late payments on home equity lines of credit jumped to 0.84 percent in the third quarter. That was up from 0.77 percent in the second quarter and was the highest since the final quarter of 1997. The delinquency rate on home-equity loans in the third quarter rose to 2.28 percent, a two-year high.
Meanwhile, the delinquency rate on "indirect" auto loans, arranged through dealerships, jumped in the third quarter to 2.86 percent, a 16-year high.
Asked why credit card late payments declined while delinquencies on other types of loans increased, Greg McBride, a senior financial analyst at Bankrate.com, said: "Credit cards have more payment flexibility than installment debt such as auto loans and home equity loans. When times are tough, consumers can skate by on the minimum payment on the credit card, but the $500 car payment is still a $500 car payment."
For those in distress, he said, "The credit card is the line of credit that is going to put food on the table and pay for other day-to-day necessities."
