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While delinquencies improve, debt consolidation may help those still in trouble
By Marvin Milner on Jul 8th, 2010
The number of troubled accounts in the country saw a decline, according to a recent report from the American Bankers Association.
In the first quarter, the number of delinquent accounts dropped from 3.19 to 2.98 percent, the firm reported. Late payments on credit card debt fell to 3.88 percent of these products, the ABA said.
The first quarter marked the first time that the number of credit card debt accounts in delinquency came in at below 4 percent in eight years. Meanwhile, improvements were also seen on late payments for mortgages, which dropped to 4.12 percent of home loans.
"It's clear that consumer balance sheets are improving. People are borrowing less, saving more and building wealth," said James Chessen, ABA chief economist. "These are all positive signs."
Still, other consumers may be having a difficult time paying off their credit card debt or home loans. One solution they might consider is debt consolidation, which can lead to lower interest rates on their plastic.
With interest rates reduced, people may find they have more cash to pay off other debts, or speed up the reduction of what they owe on credit cards.
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