US credit crisis

According to the recent press release from the American Bankers Association, Consumer Credit Delinquency Bulletin, in the last quarter of 2007 consumer credit delinquencies got to the highest level since 1992. This trend affected all 8 closed-end installment loan categories - a rather unusual occasion. The ABA defines delinquency as a payment on the loan which is 30 days late or more.

"The rise in consumer credit delinquencies is consistent with a rapidly slowing economy," said James Chessen, ABA chief economist. "Stress in the housing market still dominates the story but it's a broader tale of an overall weak economy." He also added that this rise is also mainly due to auto loan delinquencies which represent around two-thirds of all closed-end installment loans.

The USA is continued to be effected by the credit crisis, subprime loan crisis as well as turmoil in the world's stock markets. Chessen also thinks that the inability to repay loans will continue to increase in the first two quarters of 2008. "No relief for consumers is in sight as food and gas prices remain stubbornly high and income growth is anemic," Chessen said.