Could Wider Credit Availability in Wake of Sandy... - Other News


ADVERTISING DISCLOSURE: is an independent, advertising-supported web site. receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Other » Could Wider Credit Availability in Wake of Sandy Cause Spike in Credit Card Debt?

Could Wider Credit Availability in Wake of Sandy Cause Spike in Credit Card Debt?

The content is accurate at the time of publication and is subject to change.
This content is not provided by Citi. Any opinions, analyses, reviews or recommendations expressed here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by the Citi.

The news about credit card debt in America in recent months has been relatively rosy. Defaults were down, credit availability was up, and consumers didn’t appear to be relying as much on revolving debt as they had in recent years. But when Hurricane Sandy blew across the Eastern Seaboard, leaving devastation in her wake, did she also leave potential for credit card trouble?

Federal Reserve data released this week showed that consumer credit grew $11.36 billion in September, but use of revolving credit was down. Student loans and mortgage lending were up, and total consumer debt was $2.74 trillion – a record high – but credit card debt dropped for the third time in four months.

Delinquency Rates Down

Default rates on credit cards have gone down over the last year, even as more credit cards were issued.

“The national credit card delinquency rate continues to remain at the lowest levels we’ve observed in 18 years. It’s a positive situation because average borrower balances have increased over the past year as new card originations have grown,” according to Ezra Becker, a vice president at TransUnion.

Banks Raise Limits

Many lenders, including Citi, Chase, American Express and Discover, have made it clear that they will do whatever they can to help customers suffering the effects of Sandy. They encourage credit card holders to call if they need to request higher credit lines, fee waivers, and/or extensions on due dates.

This will be helpful for people as they recover from the storm, but hopefully it will not cause a rise in the number of defaults.

Staying Out of Debt

Anyone who requests a credit limit increase in order to help them recover from the storm should keep three things in mind. Credit cards are a good tool when used wisely, but remember:

  • Always make payments on time. Try to pay off the entire amount due, but if that’s not possible, pay at least the minimum balance by the due date.
  • Don’t get cash advances. Cash advances almost always carry a very high APR, and it begins accruing right away. Purchases have a one-month grace period before interest is applied.
  • Make a budget and have a realistic plan for paying off debt. Don’t just use the higher line of credit to buy necessities without having a pay-it-off plan in place. Write down expenses and income and stick to a budget as much as possible.
Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

Use of Credit Cards Grow as Delinquencies Decrease
Use of Credit Cards Grow as Delinquencies Decrease

Posted: July 15, 2013

All signs point to continued economic recovery. Credit card debt is climbing and delinquency rates are dropping, according to the latest Fed and ABA reports. Continue reading

Credit Expected to Increase as Well as Risk
Credit Expected to Increase as Well as Risk

Posted: April 11, 2014

Risk managers at North American banks foresee a greater demand for credit leading to increased balances, and increased risk for credit issuers. Continue reading

Texas is Tops for Consumer Debt in Collection
Texas is Tops for Consumer Debt in Collection

Posted: August 22, 2014

A study by the Urban Institute of Washington, DC, showed that 35% of Americans currently have a debt in collections – and that Texas leads the pack when it comes to delinquencies. Continue reading

Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, and more up to the quarterly maximum, each time you activate.
For Excellent, Good Credit
INTRO OFFER: Discover will match ALL the Miles you've earned at the end of your first year, automatically. For example, if you earn 30,000 Miles, you get 60,000 Miles. That's $600 towards travel!
For Excellent, Good Credit
Earn unlimited 1.5% cash back on every purchase, every day
For Average, Fair, Limited Credit
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!