According to Consumer Credit Delinquency Bulletin issued by the American Bank Association, late payments for consumer loans continued in the second quarter.
Forgetting to mail in your payments timely? Free bill reminder computer software.
Contributing to the late payments and debt were high gas prices and Federal Reserve interest-rate hikes, which increased expenses and lowered the amount of money available to make repayments.
ABA's survey of over 300 banks nationwide showed an increase in the percentage of consumer loans that were 30 days or more past due during the second quarter of 2006.
Late payments in eight types of closed-end installment loans increased to 1.96% (seasonally adjusted) in the first quarter of 2006. Credit card late payments also showed a slight increase to 4.41%.
But now that the Fed has stopped raising interest rates and gas prices have been dropping, there's hope for consumer debt recovery.
Yet there's another problem: Homeowners are suffering from a drop in home values as sales decreases and the market becomes more competitive.
Until recently, rising home values have increased wealth and had been a source of liquidity for borrowers which allowed consumers to spend out of savings.
Late debt payments:
Mobile home loan delinquencies rose to 3.61% from 3.37%.
Indirect auto loan delinquencies rose to 2.14% from 2.04%.
Personal loan delinquencies rose to 1.86% from 1.81%.
Property improvement loan delinquencies rose to 1.48% from 1.42%.
Boat loan delinquencies rose to 0.98% from 0.94%.
RV loan delinquencies rose to 0.79% from 0.78%.
Warning signs of being overextended on credit:
Paying only the minimum payment month after month.
Constantly being out of cash.
Late payments on important debts, such as rent or mortgage.
Taking longer and longer to pay off balances.
Borrowing from one lender to pay another.
Consumer debt solutions:
Talk with creditors to work out a repayment plan.
Don't add any more debt to your personal budget.
Avoid filing bankruptcy, because it can do long-term and more costly harm with higher interest rates.
Contact a Consumer Credit Counseling agency.
Visit Credit Federal for information about credit counseling and debt settlement.
