Credit Card Delinquency Rises to a Record High

A weak U.S. job market helped nudge credit card delinquencies to a record high in the third quarter of 2003, a banking trade association said in a report released Tuesday.

Credit card delinquencies rose to a seasonally adjusted 4.09% of all accounts in the period from 4.04% in the second quarter, the American Bankers Assn. said.

“The job market has been flying against strong headwinds, lengthening the time between jobs and intensifying financial stress,” ABA Chief Economist James Chessen said.

The average length of unemployment surpassed 20 weeks during the third quarter, the Labor Department said.

The U.S. economy has shed 2 million jobs since the start of 2001, and businesses have not yet begun to hire many workers even though conditions have improved and profits picked up. Recent economic data have reinforced a picture of the U.S. economy shifting into high gear.

U.S. gross domestic product -- which soared 8.2% in the third quarter -- may signal a brighter picture for cash-strapped consumers, Chessen said.

Delinquency rates for direct auto loans and home equity loans also rose, the ABA said. Other types of consumer loan delinquencies eased during the third quarter, the bankers’ group said. A composite of installment loans 30 days or more past due dropped to 2.14% of all accounts from 2.18%.