Saturday, June 22, 2024

What to do if you’re at risk of rising credit card delinquencies

Credit Card Delinquencies on the Rise, Especially Among Younger Consumers

The state of credit card debt in America is reaching alarming levels, with seriously overdue debt hitting the highest point in over a decade. According to the Federal Reserve Bank of New York, the share of credit card debt that is severely delinquent, meaning more than 90 days overdue, rose to 10.7% in the first quarter of 2024, up from 8.2% just a year ago.

What’s even more concerning is that younger individuals, those 35 and under, are struggling the most to pay their bills. With the average annual interest rate on new credit cards at a staggering 24.71%, it’s no wonder that many are finding it difficult to keep up with payments. The recent end of pandemic-era aid programs like stimulus payments and increased unemployment benefits, coupled with rising inflation and rent prices, has only exacerbated the situation.

If you find yourself at risk of delinquency, it’s crucial to seek help as soon as possible. Nonprofit credit counseling organizations can provide free consultations and help create debt management plans with lower interest rates and fees. It’s important to be wary of for-profit debt consolidation companies that may charge exorbitant fees.

Negotiating directly with creditors is also a viable option, as many companies have hardship programs available for those facing financial difficulties. By reaching out and being honest about your situation, you may be able to secure more flexible payment options.

While credit card delinquencies only make up a small portion of consumer debt, the increase in delinquencies is outpacing income growth. This trend, coupled with a recent stall in retail spending, paints a worrying picture of the state of the economy.

In these uncertain times, it’s more important than ever to stay informed about your financial situation and seek help if needed. By taking proactive steps to address your debt and work towards a solution, you can avoid falling further into financial distress. Remember, there are resources available to help you navigate these challenging times, so don’t hesitate to reach out for assistance.

Disclaimer: The information provided in this article is for informational purposes only and should not be considered as financial advice. The content is based on general research and may not be accurate, reliable, or up-to-date. Before making any financial decisions, it is recommended to consult with a professional financial advisor or conduct thorough research to verify the accuracy of the information presented. The author and publisher disclaim any liability for any financial losses or damages incurred as a result of relying on the information provided in this article. Readers are encouraged to independently verify the facts and information before making any financial decisions.

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