Consumer loan delinquencies fall as more people get jobs

Consumers are paying their bills on time as delinquencies fell in the fourth quarter for the first time since 2012.

Delinquencies among personal and car loans fell across the board while bank card delinquencies dropped significantly, according to the latest report from the American Bankers Association.

The AMA defines a delinquency as a late payment that is 30 days or more overdue.

“It’s rare to see delinquencies fall in nearly every category, and the levels continue to be very low by historical standards,” said James Chessen, ABA’s chief economist. “The steady creation of new jobs has been essential to keeping delinquencies low, and we’ve seen more than 10 million jobs filled in the past four years.”

Delinquencies in bank credit cards fell significantly below their 15-year average of 3.60 percent and the lowest quarter-end level in more than three years.

“Consumers are supported by a robust economy, and they continue to make judicious decisions when managing their debt levels,” Chessen said.

Delinquencies fell in two home-related categories and rose slightly in one. Home equity loan delinquencies fell along with property improvement loan delinquencies. Home equity line of credit delinquencies rose.

Delinquencies in direct as well as indirect auto loans also fell, staying below their 15-year average.

Chessen believes delinquencies will hover at very low levels for the foreseeable future as the economy continues to gain momentum and consumers remain financially disciplined.