Credit Card News
Advertising Disclosure
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.
Credit Card Applications » News » Other » High Food and Gas Prices Spark Uptick in Credit Card Delinquencies

High Food and Gas Prices Spark Uptick in Credit Card Delinquencies

By
Add to Favorites:
High Food and Gas Prices Spark Uptick in Credit Card Delinquencies

With a staggering 9.2% of Americans unemployed and first-quarter economic growth clocking in at an underwhelming 1.8% annualized rate, it should come as no surprise that more consumers experienced difficulty making their credit card and other debt payments during the first three months of 2011. The ever increasing cost of food and gas is credited for these delinquencies.


According to a statement made by chief economist James Chessen of the American Bankers Association, “consumers are feeling insecure about the economy and whether their financial resources can carry them through until conditions improve.”


The ABA is an industry trade group for banks across the country that, among other things, keeps an eye on late payments for bank-provided credit cards, auto loans, home equity lines of credit, and other consumer loans.


First quarter data shows the delinquency rate on credit cards rose to 3.4% of all accounts, an increase from the 3.28% delinquency rate of the prior three months. To put it into perspective, however, the current delinquency rate is still well below the 15-year average of 3.95%.


“With a slow-growing economy and weak job growth, there will continue to be financial stress that will make it hard for some people to pay their bills on time,” says Chessen. As defined by the ABA, a “delinquency” is any payment that is overdue by 30 days or more.


A wider examination of consumer delinquencies expanded to include home equity loans and auto payments also showed increases, from 2.68% in the fourth quarter of 2010 to 2.71% in the first quarter of 2011.


Until economic growth proceeds at a faster rate, the ABA acknowledges that any positive shift in consumer delinquency numbers is unexpected. “Until the economy shifts up a gear, employment improves, and food and gas prices stabilize, some people will struggle to make ends meet,” Chessen noted.


Due to differences between President Obama and congressional Republicans, compelling job-creation policies or significant efforts to grow the economy are unlikely to come out of Washington any time before the 2012 elections.


Despite all this, delinquencies did in fact decline in certain categories, for example property improvement loans. With these particular loans, the delinquency rate dropped from 1.26 % in the final quarter of 2010 to 1.02% last quarter. Other areas seeing fewer delinquencies:


personal loans, direct auto loans, mobile home loans, RV loans, and marine loans.

Add to Favorites:

Related News:

Amex Acquisition Increases Security

By Dar Dowling, Posted: December 9, 2016

American Express has bought InAuth, Inc., a company specializing in providing customers with mobile device authentication and intelligence solutions. Continue reading
Citi Card Tracker Unveiled

By Dar Dowling, Posted: December 8, 2016

There is a new feature in town now that Citi credit cardholders in the U.S. can track where their replacement card is every step of the way as it travels to their mailbox. This new feature is available in the Citi Mobile App, whether the ... Continue reading
New Digital Wallet From SDCCU

By Dar Dowling, Posted: December 7, 2016

The San Diego County Credit Union (SDCCU) is rolling out their brand new digital wallet app for iPhone users. With the app people can use their phone to safely do their banking, whether that means using their phones to expedite cash ... Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Get 0% Intro APR on Balance Transfers and Purchases for 21 months. After that, the APR will be 12.24%-22.24% based upon your creditworthiness.
For Excellent/Good Credit
Earn 1% cash back on gas and grocery purchases. Terms apply.
For Fair Credit
Guaranteed $500 Unsecured Credit Limit
For Bad Credit