U.S. credit card defaults rose to record highs in May ...
Bank of America—the largest U.S. bank—said its default rate, those loans the company does not expect to be paid back, soared to 12.50 percent . . . American Express . . . said its default rate rose to 10.4 percent ... Capital One said its credit card default rate rose to 9.41 percent . . . while Discover said its charge-off rate increased to 8.91 percent . . . JPMorgan Chase ... said its default rate rose to 8.36 percent[.]
From here.
What does it mean for you?
Credit card lenders are trying to protect themselves by tightening credit limits, raising standards and closing accounts. They have also been slashing rewards, increasing interest rates and boosting fees to cushion against further losses.
3 comments:
This blog is so interesting. I realize that you only had 100 seconds for this story, but I still would have appreciated a mention of the fact that the default rate on credit cards would be much lower if the credit card industry was properly regulated. If the penalty interest rate was capped at, say, 18.9%, the default rate would be much, much lower. I'm sure that if people looked closely at these defaulted accounts, they would find that the vast majority of debtors have paid back what they borrowed, and a reasonable amount of interest, too. I see who is discharging credit card debt would not have needed to do so if the credit card industry was not allowed to make it almost impossible for these debts to be paid back due to their exorbitant interest rates. thanks for the wonderful entry.
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