Late credit card payments unchanged in final quarter of 2006

While late payments on home equity loans rose in the fourth quarter of 2006, late payments on credit cards were basically unchanged, according to the American Bankers Association.  That data indicates that housing pressures have not yet caused greater difficulty for consumers looking to pay their bills.

Compare Low Interest Credit CardsThe ABA reported that late payments on home equity loans increased to 1.92 percent in the final three months of 2006 from 1.79 percent in the third quarter, reaching the highest level since the first quarter of 2006. 

However, the rate of credit card delinquencies dipped slightly to a seasonally adjusted 4.56 percent of accounts from 4.57 percent in the prior quarter, which was the highest rate since the spring of 2005.

In its quarterly study of U.S. consumer borrowing, the ABA surveys over 300 U.S. banks.  Delinquencies are defined as payments that are 30 or more days past due. 

On the whole, the rate of delinquencies among all eight loan categories followed by the ABA firmed to 2.23 percent in the fourth quarter from 2.12 percent in the previous quarter, remaining near the 10-year average rate of 2.20 percent.

Over recent months, late payments and defaults have grown among homeowners with poor credit histories or with adjustable-rate mortgages whose rates are resetting upward.

In separate congressional testimony on March 28, Federal Reserve Chairman Ben Bernanke and U.S. Treasury Secretary Henry Paulson indicated that they believed the wider economic effects of subprime mortgage problems were probably "contained."

ABA Chief Economist James Chessen agreed that any spillover impact might be limited, since credit card delinquencies usually occur first since they are unsecured, and consumers are more hesitant to miss auto and home payments.  He noted that the lack of an increase in late credit card payments suggests that consumers are handling their debt well.

Join the discussion
We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.

The editorial content on is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.

Weekly newsletter
Get the latest news, advice, articles and tips delivered to your inbox. It's FREE.

Updated: 03-25-2019