American Consumer Delinquencies Plunge to a Record Amid Recovery By Bloomberg
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(Bloomberg.com) — As the recovery of the US economy is complete, Americans have become more punctual in their repayments of debts.
American Bankers Association reported Thursday that consumer credit defaults fell to 1.21% during the second quarter. That’s the lowest level since the organization started collecting the data in 1993.
Nine of the eleven categories that the ABA tracks showed a decline in delinquencies. The report shows that the record delinquency rate for bank-issued credit card declined to 1.38%, from 2.05% during the first quarter. The percentage of consumers who couldn’t pay back home-equity loans fell to 3.42%, while the rate for bank-issued auto loans decreased to 1.45%.
“Consumers’ financial health generally continued to strengthen in the second quarter due to the robust jobs recovery and another round of federal stimulus payments,” Sayee Srinivasan, the ABA’s chief economist and head of research, said in a statement. “Consumers have remained focused on keeping credit-card balances manageable and spending within their means.”
Still, the pandemic remains “a significant economic factor to watch,” according to the statement. Srinivasan noted that the Delta variant added volatility to an already volatile economy. Many consumers are continuing to suffer.
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