Found an Associate Press article by Economics Writer Jeanne Aversa about an increase in credit card payment defaults in the past quarter. The article blames gas price increases for stretching budgets, causing credit card account to go past due.
My quarrel is not with the thesis of the article. I'm sure rising gas prices are squeezing families that may already have trouble paying their bills. My quarrel is with the inflammatory language the writer used.
And I quote: First sentence, "The percentage of credit card payments that were past due shot up to a record high..." (italics mine)
In the next paragraph we find that the delinquency rate is 4.81%, up from 4.76% in the previous quarter. Granted that's a new high, but is 0.05% really a "spike" in credit card delinquencies" (paragraph 5)??? Or is it just a lack of understanding of the mathematics involved?
Then we come to the last paragraph: "The [American Bankers] Association's survey also showed that the delinquency rate on a composite of other types of consumers loans, including auto loans and home equity loans, climbed to 2.22 percent in the second quarter, up from 2.03 percent in the first quarter."
That's a change of nearly two-tenths of a percent (compared with a "spike" of five-hundredths) but it hardly rates a mention. To my mind, the delinquency rate on all consumer loans is a bigger story, but apparently the credit card subset of the data is sexier or at least more newsworthy.