Amid Job Market Growth, Consumer Delinquencies Wane

Economic tailwinds are helping consumers make timely loan payments.

As American Banker reported Wednesday (April 4), delinquent payment rates waned a bit in the fourth quarter of last year, with late payments to banks slipping.

The financial publication noted that those late payments were lower for nine of the 11 categories tracked by the American Bankers Association (ABA), as measured sequentially from the third quarter of 2017. Payments ran the gamut of auto and personal loans and credit cards, among other borrowing activity.

The percentage of credit card borrowers more than 30 days late on their payments now stands at the lowest level seen in three and a half years, said American Banker. Bank card delinquencies were down 16 basis points to 2.46 percent of all accounts, below the 15-year average of 3.6 percent.

The composite ratio was 1.64 percent in the latest reading, down four basis points and below the 15-year average of 2.14 percent.

The data comes in the wake of a relatively weak third-quarter report, said the American Banker.

In a statement that accompanied the ABA data, Chief Economist James Chessen noted, “It’s rare to see delinquencies fall in nearly every category, and the levels continue to be very low by historical standards. 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.”

The economist also stated that delinquencies are likely to remain low, as “tax reform has put more money in Americans’ paychecks, which makes it a little easier for them to meet their obligations each month. Consumers have done a remarkable job of managing their finances over the last several years, and we expect that will continue as the growing economy reinforces their financial footing.”


Latest Insights: 

The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.


To Top