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Credit Card Applications » News » Other » U.S. Sees Record-high Delinquencies

U.S. Sees Record-high Delinquencies

October 05, 2009
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The credit card industry is expected to post higher losses this quarter as a result of the latest figures from the American Bankers Association (ABA). According to the financial organization, credit card delinquencies in the U.S. have reached a record high level during the second quarter of this year. Many analysts believe that the increase in delinquencies is due to the declining employment figures. Experts now say that the unemployment rate in the U.S. can reach the 10-percent mark by the end of this year or early in 2010.

According to the ABA's Consumer Credit Delinquency Bulletin, payments 30 days late or more, better known as delinquencies, rose to 5 percent by June 30, the end of the second quarter. The rate during the previous quarter stood at 4.8 percent. By comparison, the delinquency rate almost three decades ago was only 2.8 percent.

Analysts point out that the worsening job market, coupled with the troubled economy are to blame for the poor performance of the cardholders. Economic experts usually rely on the close relationship that delinquencies and unemployment rates have to predict potential credit industry losses.

In some areas of the U.S., the credit card delinquency rate is expected to be substantially higher because of higher unemployment rates. Chicago, for instance, expects delinquency rates to reach the 10-percent mark with the state jobless figure standing at 10.5 percent, some 0.8 percent higher than the national average.

Economic analysts, however, are optimistic that the worst recession in 70 years may finally be in its closing months. Experts say that even with the end in sight, the U.S. economy still has a long way to go before fully recovering from the global financial meltdown. They add that the important thing is for businesses and corporations to begin hiring once more to avert further problems.

The touch economic environment has also altered the spending behavior of most Americans. Many economists believe that consumers are keen on saving a larger portion of their income rather than spending them. Analysts say that the focus many Americans now have is on their savings and how to make the most of the money they have. This radical change in the way of thinking can lead to significant changes in the credit card industry, which has relied on unrelenting purchases by cardholders in the past. With new spending behaviors in place, many economists are hopeful that cardholders will avoid incurring substantial credit debts.

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  • Larry
    With the Virgin / Barclaycard signature offer, there seems to be some consumer deception or maybe even outright fraud goin on.   I decided to jump on this offer..  read all the info on it..  was approved for their platinum card, paid the fee, then was only awarded 10,000 points instead of the advertised 20,000.   When i inquired about the less than advertised bonus points, Barclaycard claims only Signiture Visa cardmembers get the 20,000..  as a platinum cardholder, you don't qualify for that level of bonus, so you get 10k instead.   Well, in their current ongoing promotions, it states plain as day that....    Applicants approved for the Visa Signature or Platinum Card with $49 annual fee will receive 20,000 Bonus Points awarded to your Virgin America Rewards Account at the close of the first billing statement in which you make your first purchase or balance transfer (that is not returned or rescinded) and have paid the Annual Fee on the account (and such fee is not rescinded). They don't mention anything about a separate program for platinum cardholders..  However, trying to get someone to resolve this issue with either Virgin or Barclaycard seems to be rather impossible.. Seems to me they're simply drawing people in with the fraudulent offer, then simply saying, oh, we're sorry you don't qualify..  but thanks for signing up for our garbage credit card with insane fees..   
  • CreditLandCom
    Thank you for sharing your experience with us. We have reviewed this offer and you are correct, nowhere it is mentioned that 20,000 Bonus can become a 10,000 Bonus all of a sudden... We will mention this in our review of this card so others can make an informed decision. Another way to get Virgin miles is to get an American Express charge card: The Business Gold Rewards Card® now offers 50,000 Miles, though you do have to spend $5,000 in the first three months of card membership to get it. It also has $0 introductory annual fee for the first year, then $175. http://www.credit-land.com/details/the-business-gold-rewards-card-from-american-express-open.php Premier Rewards Gold Card now offers 25,000 Miles, though you do have to spend $2,000 during your first three months of Card membership. It also has annual fee of $0 for the first year, then $175. http://www.credit-land.com/details/american-express-premier-rewards-gold-card.php While we do not know If any of these offers make sense to you, we are at least sure that you will get advertised bonus in full if you decide to get them... Conversion rates for Virgin America are: 100 Elevate Points = 200 Membership Rewards® Points All the best.
  • Deborah Ellsworth
     would very much like to start a new credit history  by making payments on time I would tohave a credit card that is NOT PREPAYID! I don't need a card with a high limit just something to start a new credit history. Thank You Deborah Ellsworth
  • Deborah Ellsworth
    I would very much like to start a new credit line to get back on track. I DO NOT WANT A PREPAID CARD!! This new credit card if I am approved does not have to hace a high limit just something for me to start over again and prove myself ThankYou. D Ellsworth
  • Miss Edna
    there is a huge problem with the RFIP chip: it is easily compromised. There are already 'readers' in the form of what looks like a cellphone in a case, that scans all the info in the chip by merely walking near a person -- this 'reader' penetrates leather, cloth, spandex, etc. The only thing it will NOT penetrate is METAL. Perhaps one has seen commercials touting metal credit card cases. Here is my hint for a free fix: cut a piece of aluminum foil or use the foil that is used to keep foods fresh, like coffee. Cut it so that when folded once, it forms a sleeve for your credit card. place the credit card in the sleeve, then place the sleeve in your wallet.
  • Robin Parks
    I am looking to apply for the AARP Visa signature card from Chase that offers $100 after spend $500 in first 3 months, no annual fee and 0% interest first year; I don't want to mail in offer because of having to write in Social security #. Can you direct me to the proper on-line site?
  • CreditLandCom
    The Chase bank cards are not currently available at Credit-Land.com, but you can consider applying for the Citi® Dividend Platinum Select® Visa® Card - $100 Cash Back. The cards has similar terms and cash back program.
  • Becky
    This is Becky Now what do I do just waqit for acard to come to me?
  • CreditLandCom
    Once you have applied, you should receive a letter within 10 business days letting you know if you were approved and when your card will arrive. If you did not receive any letter or notification from the issuer, you should contact them directly. Also, you should contact the issuer if you’ve been waiting for your credit card longer than 30 days. Since we are not a bank and don’t issue credit cards, we cannot give you any information about your application or credit card.
  • SavingStar
    Thank you for posting about SavingStar. Just to clarify one sentence in your article, we have over 5 million members (not 500). Thanks, Josh
  • CreditLandCom
    Sorry for the misprint. We’ve corrected the sentence. Thank you for noticing that.
  • Eric
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