September 29, 2005
Credit-card delinquencies hit record
By Greg Morcroft, MarketWatchLast Update: 12:19 PM ET Sept. 28, 2005
NEW YORK (MarketWatch) -- Pay the bills, or fill up the tank? That's the question more Americans are asking these days, according the latest report from the American Bankers Association.
The ABA report says rising gasoline prices contributed to a record rate of credit-card delinquencies in the second quarter of 2005.
'The last two quarters have not been pretty.' James Chessen, American Bankers Association
Credit-card-loan delinquencies reached a record high of 4.81% percent of accounts in the second quarter of this year, according to the association's Consumer Credit Delinquency Bulletin. See more details from the American Bankers Association.
The credit-card-loan delinquency ratio for the first quarter was revised upward to 4.76% of accounts from a previously reported 4.03%.
"The last two quarters have not been pretty," said James Chessen, ABA's chief economist. "Gas prices are taking huge chunks out of wallets, leaving some individuals with little left to meet their financial obligations.
"With gas prices still rising, the third quarter is not likely to be any better," Chessen predicted.
According to the U.S. Energy Information Administration, the average price of regular-grade gasoline across the U.S. was $2.803 a gallon Sept. 26, almost two full cents higher than the previous week's average, and a whopping 88.6 cents a gallon pricier than a year ago. See EIA retail-gas-price data.
Personal loan delinquencies rose to 1.94% from 1.83%, the ABA report said, while delinquent direct auto loans rose to 2.07% from 2.04% and the figure for indirect auto loans rose to 2.08% from 1.87%.
The report said past-due payments on home-equity lines of credit -- the lowest-delinquency-rate category -- increased to 0.43% from 0.4%.
Credit-card firms, always sensitive to the creditworthiness of their borrowers, fell last week on data showing personal bankruptcies spiked in the latest week ahead of new rules that will make it harder to secure refuge from creditors.
According to analysts at Prudential Equities, weekly bankruptcy filings for the week ending Sept. 17 rose 30% from the prior week to a record 47,505. That's 59% above the rate recorded at this time last year.
And, according to the Prudential report, the four-week moving average of bankruptcy filings was 40,046, up 8% from the prior week. So far in 2005, bankruptcy filings are running 9% higher than a year ago, according to Prudential.
On the stock market Wednesday, shares of major credit-card firms were mixed. Shares of American Express (AXP: news, chart, profile) fell 14 cents to $56.56, while Capital One Financial (COF: news, chart, profile) rose 11 cents to $80.27, MBNA Corp (KRB: news, chart, profile) shed 3 cents to $24.47, Citigroup (C: news, chart, profile) rose 4 cents to $45.13, and J.P. Morgan Chase (JPM: news, chart, profile) added 14 cents $34.02.
Greg Morcroft is New York news editor of MarketWatch.
NEW YORK (MarketWatch) -- Pay the bills, or fill up the tank? That's the question more Americans are asking these days, according the latest report from the American Bankers Association.
The ABA report says rising gasoline prices contributed to a record rate of credit-card delinquencies in the second quarter of 2005.
'The last two quarters have not been pretty.' James Chessen, American Bankers Association
Credit-card-loan delinquencies reached a record high of 4.81% percent of accounts in the second quarter of this year, according to the association's Consumer Credit Delinquency Bulletin. See more details from the American Bankers Association.
The credit-card-loan delinquency ratio for the first quarter was revised upward to 4.76% of accounts from a previously reported 4.03%.
"The last two quarters have not been pretty," said James Chessen, ABA's chief economist. "Gas prices are taking huge chunks out of wallets, leaving some individuals with little left to meet their financial obligations.
"With gas prices still rising, the third quarter is not likely to be any better," Chessen predicted.
According to the U.S. Energy Information Administration, the average price of regular-grade gasoline across the U.S. was $2.803 a gallon Sept. 26, almost two full cents higher than the previous week's average, and a whopping 88.6 cents a gallon pricier than a year ago. See EIA retail-gas-price data.
Personal loan delinquencies rose to 1.94% from 1.83%, the ABA report said, while delinquent direct auto loans rose to 2.07% from 2.04% and the figure for indirect auto loans rose to 2.08% from 1.87%.
The report said past-due payments on home-equity lines of credit -- the lowest-delinquency-rate category -- increased to 0.43% from 0.4%.
Credit-card firms, always sensitive to the creditworthiness of their borrowers, fell last week on data showing personal bankruptcies spiked in the latest week ahead of new rules that will make it harder to secure refuge from creditors.
According to analysts at Prudential Equities, weekly bankruptcy filings for the week ending Sept. 17 rose 30% from the prior week to a record 47,505. That's 59% above the rate recorded at this time last year.
And, according to the Prudential report, the four-week moving average of bankruptcy filings was 40,046, up 8% from the prior week. So far in 2005, bankruptcy filings are running 9% higher than a year ago, according to Prudential.
On the stock market Wednesday, shares of major credit-card firms were mixed. Shares of American Express (AXP: news, chart, profile) fell 14 cents to $56.56, while Capital One Financial (COF: news, chart, profile) rose 11 cents to $80.27, MBNA Corp (KRB: news, chart, profile) shed 3 cents to $24.47, Citigroup (C: news, chart, profile) rose 4 cents to $45.13, and J.P. Morgan Chase (JPM: news, chart, profile) added 14 cents $34.02.
Greg Morcroft is New York news editor of MarketWatch.
# posted by Sponduliqs @ 4:25 PM 
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