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Overdue Consumer Debts At Highest Level In 15 Years
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This Link is located in the Public Channel Housing Bubble and Bear Links.
Posted by ian 1 year 229 days ago (bloomberg.com). Views: 57
Tags: consumer debt credit crisis |
| Related Tags: economics stock market banks housing bubble recession gold bailout |
Consumers fell behind on car, credit- card and home-equity loans at the highest level in 15 years, another sign the U.S. economy is slowing, according to the American Bankers Association's quarterly survey.
Payments at least 30 days past due increased across all eight categories of loans tracked during the fourth quarter, the Washington-based group said today in a statement. Late loans in the quarter climbed 21 basis points to 2.65 percent of all accounts in a consumer-loan index created by the group.
``It's an indication of the degree of stress consumers are facing right now,'' said Nigel Gault, director of U.S. research at Lexington, Massachusetts-based Global Insight Inc. ``People overextended themselves, they took out loans they thought weren't a problem as long as house prices kept rising.''
Lenders including American Express Co., the third-biggest credit-card network, and Capital One Financial Corp. doubled reserves for soured debt in the fourth quarter amid the worst housing slump in a quarter century. Overdue consumer loans were the highest since 1992, the ABA said, a year after a U.S. recession ended. Delinquencies are a lagging indicator that often don't peak until late in an economic slowdown.
Overdue payments will keep rising in the first half of this year as ``food and gas prices remain stubbornly high and income growth is anemic,'' ABA chief economist James Chessen said.
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