msnbc.com news services
updated 1/7/2009 5:36:53 PM ET 2009-01-07T22:36:53

Late payments on consumer loans in last year’s third quarter hit the highest level since record-keeping began in 1980, the American Bankers Association (ABA) said Wednesday.

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The association said delinquencies rose to a seasonally adjusted 2.9 percent from 2.68 percent in the second quarter. The number is a composite ratio reflecting the percentage of accounts across eight categories of consumer loans with payments overdue 30 days or longer. The previous record was 2.88 percent, set in the third quarter of 1989, ABA spokeswoman Carol Kaplan said.

In a separate report, Fitch Ratings said Wednesday that U.S. consumers fell further behind in paying off their credit cards last month — a trend that’s expected to worsen this year amid growing unemployment.

An index of charge-offs on so-called prime credit card portfolios rose in December to its highest level in four years, while the rate at which cardholders repaid outstanding balances slowed to its lowest since mid-2004, Fitch said. Charge-offs are loans written off as not being repaid.

The Washington-based ABA said delinquencies on consumer loans hit record levels in the July-through-September period for two types of loans: indirect auto loans and home equity lines of credit.

Indirect auto loans, which account for 90 percent of auto loans, are bank loans arranged through a third party such as an auto dealer. Delinquencies for those loans jumped to 3.25 percent from 3.07 percent in the second quarter, the ABA said. The previous record in that category was 3.13 percent, set in the fourth quarter of 2007.

Delinquencies for home equity lines of credit rose to 1.15 percent from 1.08 percent. The previous quarterly high in that category was 1.1 percent, set in last year’s first quarter.

“The number one factor in rising consumer credit delinquencies is job losses,” said James Chessen, the ABA’s chief economist. “With one million jobs lost in the first three quarters (of 2008) and two and a half million expected for the year, delinquencies of all types of consumer loans will likely increase in the coming quarters.”

The bank card category was one of only two that showed a third-quarter decline in delinquencies, dropping to 4.2 percent of all accounts from 4.54. The other category that fell was direct auto loans, with delinquencies declining to 1.71 percent from 1.77 percent.

In addition to indirect auto loans, categories that make up the composite ratio and posted increases in third-quarter delinquencies included: property improvement, marine, recreational vehicle, mobile home, personal loans and home equity loans.

In its credit card report, Fitch said its prime charge-off index in December grew to 6.84 percent, rising 31 percent higher than a year earlier. Fitch forecasts the rate will reach 8 percent this year as job losses spread.

Charge-offs by retailers for store-issued cards surged last month to a three-year high of 10.5 percent. Fitch said the latest figure is 49 percent higher than the retailer charge-off index in December 2007. Fitch expects the rate to surpass 12 percent by midyear.

The charge-off rate measures the amount of balances written off as uncollectable as an annualized percentage of total loans outstanding.

In December, an index that tracks repayment of outstanding card balances recorded its sharpest one-month drop on record, dropping to about 16 percent from more than 18 percent the previous month, Fitch said.

"Consumers continue to struggle amid a rapidly deteriorating employment situation and from declining property values and other measures of wealth," said Mike Dean, a managing director with Fitch.

The Associated Press contributed to this report.

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Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 1.97%
$30K home equity loan FICO 5.80%
$75K home equity loan FICO 4.54%
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Source: Bankrate.com