Credit-Card Debt Are Worse Than What It Seems - Other News

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com 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. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Other » Credit-Card Debt Are Worse Than What It Seems

Credit-Card Debt Are Worse Than What It Seems

Credit-Card Debt Are Worse Than What It Seems
The content is accurate at the time of publication and is subject to change.

Recently it was announced by the Federal Reserve that Americans have cut down their rotating consumer credit, which are typically balances on the card by almost $7.4 billion in the month of May. It is not a one-off but an annualized rate of 10.5 percent. According to the Fed from 2008 end individuals have cut the balances by almost 13% or $127 billion. These headlines generally are very reassuring.

When people clear off their debts, it is expected that the delinquency rates will fall. That is the reason why the American Bankers Association declared that the card percentage with payments which were over 30 days late declined in the first quarter of the year to levels lowest since 2002. It had even gone down below the 15-year averages. According to ABA`s chief economist, James Chessen it is very obvious that there is an improvement in the consumer balance sheets. He feels that there is less borrowing by people and they are saving more cash to build wealth. All these are no doubt positive signs. This does sound like good news.

The reason why there is a decline in the credit-card balance is not that individuals are paying off their credit with extra earnings and spare cash. The key reason for this positive phenomenon is that the banks have been writing off the credit when small borrowers default. This surely decreases the balances, but in a very different way.

According to the Fed in the first quarter of 2011, the balances on credit-card fell by almost $19.5 billion. Here one needs to see the amount of credit which was written off. According to data available from the Federal Deposit Insurance Corp, the amount was around $18.7 billion.

It has been seen by the data from the American Bankers Association that a smaller percentage of credit cards still have over dues, there is an increase in the average sum owed on those cards. Mr. Chessen explains that this suggests that less number of people are facing problems, but those who are, have bigger unpaid balances.

People are doing whatever they can to ensure minimum payment on their credit cards every month to keep the cards active as this is their final cash lifeline.

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:

With The Chase App Cardholders Can Send Gift Cards
With The Chase App Cardholders Can Send Gift Cards

Posted: April 19, 2019

Have you ever wished you could just send a gift card to someone easily and quickly? If so you might want to check out the new feature Chase has added to their app letting users do just that. With the Chase App cardholders can not only… Continue reading

Getting 100,000 Bonus Points with the Marriott Bonvoy American Express Credit Card
Getting 100,000 Bonus Points with the Marriott Bonvoy American Express Credit Card

Posted: April 17, 2019

If you have the Marriott Bonvoy American Express credit card you might want to head over to the website to register your card so you can pick up an extra 100,000 bonus during the year. How does it work? It is fairly simple. Continue reading

Refer a Friend for the Chase Sapphire Preferred Credit Card and get 15,000 Points
Refer a Friend for the Chase Sapphire Preferred Credit Card and get 15,000 Points

Posted: April 15, 2019

People with the Chase Sapphire Preferred Credit Card can now get 15,000 bonus points if they refer a friend – and the friend is approved. What’s even better is that they can make up to five referrals which would let them bank an extra… Continue reading

Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Introducing the New Citi Rewards+ Card - the only credit card that automatically rounds up to the nearest 10 points on every purchase - with no cap
For Excellent, Good Credit
Enjoy 70,000 bonus miles after spending $5,000 on purchases in the first 90 days
For Good/Excellent Credit
See Rates & Fees
Perfect credit not required for approval; we may approve you when others won’t
For Fair/Bad 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!