Will more Americans fall behind on their credit card debts this year?
According to a recent
Time article, a report issued by the Federal Reserve Bank of New York said
that Americans’ credit card debt rose by $2 billion in the third
quarter last year. This rise in credit card debt occurred even though
Americans’ total debt dropped. (Much of the drop reflects mortgage
debt. Americans also added $23 billion in new student loan debt and $18
billion in car loans during the same quarter.) And, according to a credit
bureau, while the average borrower had just under $5,000 in debt as of
the third quarter of 2012, the average borrower will likely have almost
$5,500 in debt by the end of this year.
While delinquencies on bank-issued credit cards were as low as they’ve
been in nearly two decades during the third quarter of 2012, slow job
growth and falling consumer confidence could indicate a rise in delinquencies in 2013.
Another problem concerns subprime customers. Banks seem to be signing up
customers who are more likely to default on their debts. The number of
subprime borrowers rose more than five percentage points between 2010
and 2012. Banks seem especially interested in signing up millennials.
These young adults haven’t established a credit history yet and
are just beginning to realize their earning potential.
Maxed out credit cards may send some consumers to bankruptcy court. If
you feel like you could benefit from
legal advice regarding your debts, call a knowledgeable and trusted San Diego bankruptcy attorney.