Credit Card Bills & the Credit Crunch
The credit crunch is hitting people right where it hurts: More consumers are paying their credit card bills late, and credit card companies are becoming increasingly aggressive about going after their money, The Wall Street Journal says today.
The percentage of credit card delinquencies rose in the first quarter to 4.51 percent, up from 4.41 percent a year earlier, The Journal said. Revolving debt, which mainly consists of the balances on credit cards, rose in July at a 4.8 percent clip, a jump from June’s 3.5 percent jump.
Credit card companies, in turn, are trying new tactics to get their money, even to the point of going after people late on just one payment,
The Journal said:
For their part, banks are under tremendous pressure to shore up their balance sheets amid an onslaught of bad loans and mortgages. Financial institutions are responding by working past-due accounts more aggressively. They are putting their best collectors on their toughest-to-collect accounts (those that are at least 60 or 90 days past due), hiring outsourcing firms to supplement their internal efforts and putting new hires on accounts that are in the early stages of delinquencies.
These moves comes are banks are being stung by losses on bad loans and mortgages. It’s another example of how the credit crunch is becoming something consumers are dealing with in their everyday financial lives.
As we explained in our story today, both presidential candidates so far have avoiding dealing with the credit crunch as a campaign issue. With more people having trouble paying their credit card bills, and facing newly agressive collections efforts because of it, they may not be able to for much longer.