The nationwide drop in U.S. gas prices means more consumers are staying current on their debts, according to a quarterly report from the American Bankers Association.
During Q3 of 2014, delinquency rates fell in 7 of 11 consumer loan categories including car loans arranged through auto dealers, personal loans, and property-improvement loans. The delinquency rate for eight closed-end loan categories dropped from 1.57 percent in Q2 to a record low of 1.51 percent in Q3.
But the delinquency rate for bank-issued credit cards rose in Q3 from 2.43 percent to 2.51 percent, though that’s still below levels it reached in 2011 and 2012.
The ABA report doesn’t track first mortgages, the largest category of consumer debt. But home-equity loan payments that were less than 30 days late fell from 3.36 percent to 3.24 percent, while delinquencies — payments more than 30 days late — rose slightly from 1.50 percent to 1.52 percent.
Every one-cent-per-gallon decline in gas prices saves consumers about $1 billion, American Banker reported. Average gas prices topped out at $3.77 in June before falling to $3.38 in October, a 10.3 percent drop. By the first week of January, prices had dropped all the way to $2.31 per gallon, down 38.7 percent since June. That’s likely to continue the reduction in payment delinquencies, which have been declining — though at a much slower pace — since 2012.