While many economic measures are showing improvement for Florida and elsewhere around the country, one indicator is not moving in a positive direction. According to reports from national financial services company, many consumers are no longer paying off their credit card debt as timely as before. As a result, there has been a recent increase in the number of charge-offs for credit cards.
The reports show that the amount of debt that credit card companies are unable to collect from their customers has increased in the past two fiscal quarters. Though the country is experiencing strong employment levels, the increases in charge-offs are the highest in the last eight years. Experts cite that the ratio of charge-offs to unemployment has risen quickly from near all-time lows, creating concerns.
After the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 was passed, it was more difficult for consumers to obtain a credit card. However, as the economy improved, banks loosened their standards and more credit was issued. As this trend continued, experts believe that as underwriting standards loosened, asset quality can deteriorate rapidly. Should a recession occur, banks could continue to see a rise in charge-offs for credit card accounts.
Many Americans are benefiting from a stronger economy and higher employment levels. However, others are still struggling with credit card debt that may be overwhelming. A Florida bankruptcy attorney can work with clients to determine the best course of action for a specific situation. An experienced attorney will help evaluate all options and develop a plan to get someone back on track financially.
Source: newsmax.com, “Moody’s: Despite High Employment, Americans Slow to Repay Credit Card Debt“, Cathy Burke, July 2, 2017