This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Consumers Choose A Different Type Of Overspending

Paying their bank cards on time doesn't seem to be a problem for most Americans. According to the American Bankers Association, delinquencies in the fourth quarter of 2012 fell to an 18-year low. But the total fees collected from checking account overdrafts are another story, as they rose 1.3 percent in 2012, according to a new report. Moebs, the economic research firm that tracked this data, says the increase comes after three years of declining fees.

Taken together, the two stats suggest a picture of Americans committing to getting a handle on debt, but who may be stretching their checking accounts thin as a result.

Bank card delinquencies hit 18-year low

First the good news: The American Bankers Association reports bank card delinquencies fell 28 basis points in the fourth quarter of 2012. That means only 2.47 percent of all bank card accounts were delinquent during the quarter, a number that is well below the 15-year average of 3.87 percent. It is the lowest delinquency rate since the third quarter of 1994.

The ABA says the decline in bank card delinquencies is likely part of a consumer response to economic uncertainty.

"Consumers continue to carefully manage their finances in an effort to get debt levels under control and build up a secure financial base," said James Chessen, ABA's chief economist, in a written statement.

Overdrafts climb to $32 billion in 2012

Perhaps consumers are trying to get a handle on their credit card debt, but some are apparently having difficulty maintaining enough in their checking accounts to avoid overdraft fees. Moebs found that bank and credit union customers racked up $32 billion in overdraft fees in 2012.

While that amount is below the 2009 level of $37.1 billion, it is an increase from 2011, when consumers paid $31.6 billion in overdraft fees. The 2012 increase in fees comes despite increased government regulations, such as requiring consumers to opt-in to overdraft programs.

"Having truly captured the massive alterations that have gone on in overdrafts in the past several years, it's clear that overdrafts are going to be with us for a long, long time," said Michael Moebs, author of the study, in a press release.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,214.42 -10.15 -0.06%
S&P 500 2,110.74 -3.12 -0.15%
NASDAQ 4,987.89 +20.7530 0.42%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs