Survey: Bankers foresee upturn in credit card-related bankruptcy

Many U.S. bankers told researchers at FICO that they believed credit card delinquencies would rise in the near future, as some consumers prematurely celebrate the end of the economic downturn.

The study, which was commissioned by the Professional Risk Managers’ Association, indicated that the demand for credit would rise much more quickly than bankers were prepared to make it available, leading to higher interest rates. Nor were credit cards the only type of consumer financial product expected to experience a rise in delinquencies, as 63 percent expected such a trend from small business loans and 56 percent predicted similar problems with home equity lines of credit.

While the personal finances of some Americans have improved in the past few months, the bankers’ pessimism contrasts strongly with the general tone of cautious optimism that many other recent economic predictions have struck.

If, as the bankers predict, interest rates rise in the coming months, debt management will become a much higher priority than it already is for many Americans struggling with debt problems and credit issues.