Credit card users nationwide are struggling with credit card debt, especially with the added stress of high unemployment. As people struggle to make ends meet in the recession, late credit accounts have become a pervasive issue among cardholders. Last year saw record numbers of accounts that were at least 90 days behind.
However, a report from TransUnion indicates that 2010 may be at least slightly better when it comes to late credit accounts. The credit bureau’s analysis indicates that the number of credit card accounts that are more than 90 days late should fall by 2.8 percent next year compared to 2009. That’s a good sign that Americans are finally starting to regain stability in the wake of the financial crisis.
Ezra Becker, director of consulting and strategy for the firm, said that the drop next year would mark the third straight year of declines. However, the 2.8 percent drop would mark the smallest decline in that time. This could mean some consumers have hit their limit when it comes to eliminating debt.
The Credit CARD Act will bring even more changes to the credit industry
“It will be interesting to see how the CARD Act, primarily taking effect in February 2010, will impact both consumers and lenders,” Becker said.
A number of provisions are set to take effect in February 2010 include limiting card issuers’ ability to raise interest rates arbitrarily. As a result, many lenders have been switching their customers’ accounts to a variable rate. But the good news is that consumers will have more transparency when it comes to rate changes. That means delinquencies caused by higher interest rates could decline once the law takes effect.