In January, late payments on credit cards hit a record high, according to Fitch Ratings. By year end, Fitch estimates that credit-card defaults, or balances that credit-card companies write off as uncollectible, will surpass the previous record of 7.7% recorded by the Federal Deposit Insurance Corp. in the first quarter of 2002, and approach 9%. Defaults hit a record low of 1.37% in the first quarter of 1984 and hovered well under 5% during the recent boom years, according to the FDIC.
And consider this report from February 27:
Moody's predicted the charge-off rate index could move into double digits by the end of this year if unemployment keeps rising. The government releases the February unemployment rate, which could touch 8%, next Friday.
The January delinquency rate, which forecasts the charge-off rate, climbed to 5.94%, the highest in 17 years. The record high of 6.31% in January 1992 is likely to be passed in the months ahead, Moody's said.
Meanwhile, payment rates, which have been falling since early 2007, are near a five-year low. In January, the principal payment rate fell to 16.39%, about 2.7 percentage points below the rate in January 2008.
2 comments:
Could it be that many of us have said enough? We watch as our money is given away by those with no authority to do so, and we are lied to the whole way through, and stuck with the bill. Honestly, I quit paying the minute they started giving away my money, as there is no point. Their whole credit score is a scam anyway, used to take further money from those who have the least. A company I walked away from used to check peoples score a mutiple of times(as this lowers the score), and then give them the highest possible rates on their loan's. Its all crooked folks, and the sooner you stand up and react, the sooner we can fix this. Many people will not notice until it is too late, as they still watch T.V., and believe what their told..
For me, the post, in some way, means that we should settle as soon as possible all our credit card payments. If we stop maing payments now, that would only leave us with way too high credit card payments to make in the future. If we settle it now, at least, in some way, we are keeping ourselves from incurring higher late payment charges. That wasn't our money we used in the first place. Now, once we have settled our credit card payments, we have to start monitoring how we use it and make sure that we keep everything to a minimum.
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