U.S. late credit card payments rose in Q4

Falling interest rates had helped keep delinquencies down, the American Bankers Association said in a statement accompanying the figures.

Credit card delinquencies inched up to 3.88 percent of all accounts in the fourth quarter from 3.77 percent in the third quarter. Based on the dollar amount of outstanding credit card debt, delinquencies rose to 4.67 percent in the fourth quarter from 4.45 percent in the third.

But a composite index of eight types of consumer loans, including auto, home equity and personal borrowing that were 30 or more days past due fell to 2.32 percent from 2.40 percent, the ABA said.

"Despite continued layoffs and marginal economic growth, it appears that the rate reductions throughout 2001, along with continued high mortgage refinancing and automotive financing incentives, helped keep delinquencies down," said James Chessen, the chief economist for the bankers' group.

The U.S. economic slump began in March and the pace of layoffs picked up after the Sept. 11 attacks. The Federal Reserve cut short term interest rates 11 times during the year to breathe life into the economy.

The reduction in late payments on closed-end instalment loans was largely caused by a decline in auto loan default ratios, Chessen said. That drop was probably caused by the many car buyers who took advantage of zero-percent financing and other incentives offered by auto makers, he said.

Direct auto loan delinquencies declined to 2.27 percent in the fourth quarter from 2.56 percent in the third quarter, while late indirect auto loan payments fell to 2.35 percent from 2.45 percent.

The number of late payments on home equity lines of credit increased to 1.38 percent in the final quarter of 2001 from 1.24 percent in the third quarter.