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Consumers Struggle To Pay Debts

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Life insurance companies’ middle-market customers are showing signs of financial strain.[@@]

The delinquency rate for credit cards increased to 4.81% of accounts in the second quarter, up from 4.28% in the second quarter of 2004, according to the American Bankers Association, Washington.

The second-quarter delinquency rate, which does not reflect summertime increases in gas prices or the effects of Hurricane Katrina and Hurricane Rita, set a record, the ABA says.

The ABA also found that the delinquency rate for home equity loans increased to 2.75%, up from 2.5% for the second quarter of 2004.

ABA Chief Economist James Chessen predicts that the third-quarter delinquency figures will look worse.

“Gas prices are taking huge chunks out of wallets, leaving some individuals with little left to meet their financial obligations,” Chessen says in a statement.