U.S. bank card delinquencies dipped in the first quarter of this year to the lowest level in eight years, reflecting measured improvement in the overall economy.

The American Bankers Association said consumer loan delinquencies improved for the third quarter in a row, falling to 2.98 percent of all accounts from 3.19 percent the prior quarter.

Delinquencies are defined as a late payment that is 30 days or more past due.

The ABA tracks late payments for bank-provided credit cards, auto loans, home equity lines of credit, and other consumer loans.

"It's clear that consumer balance sheets are improving. People are borrowing less, saving more and building wealth. These are all positive signs,'' said ABA Chief Economist James Chessen in a statement.

Bank card delinquencies fell to 3.88 percent of all accounts. It was the first time since the second quarter of 2002 that the level has fallen below 4 percent.

Housing-related loans also showed improvement, the ABA said, noting that home equity loan delinquencies fell for the first time in two years to 4.12 percent of all accounts.

"This is the first inkling that stability is taking hold in the housing market, but the pace of recovery will still be long and drawn out,'' Chessen said.

Despite the encouraging first-quarter data from the ABA, more recent housing-related and economic signals have been mixed.

Last week the National Association of Realtors reported that contracts for pending sales of previously owned homes plunged a record 30 percent in May, far more than expected, after a popular tax credit expired.

Data released on Tuesday showed the U.S. service sector expanded in June for a sixth straight month but the rate of growth slowed to the lowest pace since February, providing the latest evidence that the economic recovery is cooling.

Chessen said the overall risk in banks' consumer loan portfolio is improving and will continue to do so, while acknowledging the uneven healing of the economy.

"Banks are putting losses behind them and following a prudent approach to new loans because the on-again, off-again economy is keeping risk high,'' he said.