Consumers Tap into Savings to Meet Rising Delinquent Payments

Conducted six months following Online Resources’ first delinquency study, the survey of more than 1,000 nationally representative U.S. households finds that Americans in all demographic groups continue to prioritize among their bills by creating a “delinquency budget.”

The mortgage still ranks first as the bill that households are most likely to pay, although the percentage of households who reported being delinquent with their mortgage payments has increased significantly.

Key findings of the survey include:

• 52 percent of households report that it is harder to meet their financial obligations, an increase from 43 percent six months ago
• More than half of households reported taking money out of savings, including retirement accounts, to pay for necessary living expenses or their household bills
• Although credit cards continue to have the highest reported delinquency rate, mortgage and utility delinquency rates have increased significantly in the past six months
• No demographic is immune from delinquency: 14 percent of households with an income greater than $100,000 reported being delinquent and 13 percent of households whose mortgage is paid off also have at least one bill 30 or more days overdue
• A sizeable portion of households are severely delinquent: 14 percent reported having at least one bill 90 days or more overdue, with credit cards having the highest percentage of severe delinquency

Additionally, the web, by an expanding margin, continues to be consumers’ preferred method for resolving their delinquency, as compared to other traditional collection methods.

“The nation’s ongoing credit challenges will likely affect more companies in recurring bill industries, more deeply,” said Robert R. Craig, executive vice president and general manager of eCommerce Services for Online Resources. “Billers who provide a comprehensive set of web-based and other services for resolving delinquencies can gain a distinct advantage. Giving consumers options helps to maintain better relationships throughout the entire customer lifecycle—not just the hard times.”

More information about the results of this survey is available in a report titled “Payment Delinquencies Spread Across Billing Industries & Household Demographics: An Updated Survey of US Consumers & the Bills They Pay.” To obtain the report, visit the Press Room in Online Resources’ web site at http://www.orcc.com or go to http://www.orcc.com/card/research_report.asp. This is the fourth in a series of reports published by Online Resources about the developments in consumer debt and collection technology.