The Check Spent a Lot of Time in the Mail in Early 2009
If the U.S. economy is on the mend, then a new report may be proof that the first months of this year were rock bottom. Consumers fell behind on credit card bills and home equity and car loans at a record pace in the first quarter of 2009.
The bad news comes in the latest Consumer Credit Delinquency Bulletin from the American Bankers Association. That report shows that a record 4.75 percent of all credit and bank card accounts were delinquent in 2009's Q1, with the balances on those delinquent accounts reaching 6.6 percent of all outstanding credit/bank card debt, also a record. (Note: the ABA classifies a delinquency as a scheduled payment that is overdue by 30 days or more).
Under the ABA's "composite ratio", which follows delinquencies across eight different types of installment loans (like home equity loans, car loans, and personal loans), U.S. consumers were late on 3.23 percent of accounts in the first quarter of 2009. That's a nudge up from the previous "composite ratio" delinquency record: 3.22 percent at the end of 2008.
Here are some more details from the Consumer Credit Delinquency Bulletin, as set out in a News Release from the ABA:
As Reuters notes, the report shows that Americans still turn to high-interest credit cards as a temporary solution that can have long-lasting consequences: "more cardholders relied on plastic to meet day-to-day expenses" in early 2009, and meanwhile "U.S. consumers ended March with $939.6 billion of revolving credit outstanding."
Things may not get much better until the job market rights itself. "Borrowers are struggling as the nation's jobless rate sits at a 26-year high of 9.5 percent, with 6.5 million jobs having disappeared since the recession began in December 2007," Reuters reports.