According to a report in the Washington Post, many of the nation’s major banks say they have noted a rise in credit card defaults in the past three months.
For example, J.P. Morgan Chase reported that the number of people defaulting on the credit card loans rose by 45 percent last quarter, compared with the same period in 2007. And other financial institutions are telling similar stories.
The cause of this trend cannot simply be blamed on the current situation. For more than a decade, credit card debt has been growing faster than income and savings.
In other words, many of us have been using credit to fund a lifestyle that we are not really able to afford.
All of these delinquencies have been making credit card issuers ever more cautious about who they lend to. If you are less than stellar credit, don’t count on getting a new card in the near future.
“[Banks] are not going after anyone with moderately shaky credit. They’re even being cautious with people who have great credit,” Innovest analyst Gregory Larkin told the news provider.
However, Business Week reports that some banks have started taking proactive steps to help customers who are not able to meet their credit card payments.
JP Morgan told the news provider that it has begun setting up payment programs and reassessing terms on accounts to help troubled cardholders.
The bank’s spokesperson, Tanya M. Madison, said that the financial institution is “taking the right steps to help our customers and manage our risk.”
So, if thinking about paying off your credit card debt makes you feel overwhelmed, just remember that the bank might be able to help you work out a plan. It is in their interest as well.
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