The credit card market is growing, which could be a sign that the economy is more or less recovered from the Great Recession. Unfortunately, experts point out that delinquency rates are also up. Most South Carolina consumers try to use their credit cards as responsibly as possible, but with interest rates, these financial tools can quickly spiral out of control, complicating some people’s already unstable financial matters.
Credit card debt has increased over the past two years, but that is not the only part of the market that is growing. The number of credit card accounts and available credit is also up, meaning that there are more people holding more credit cards with higher credit limits. Unfortunately, rates of late or nonpayment — delinquencies — are up from the historic lows between 2007 and 2009, although only slightly.
One expert cautioned that this increase in delinquencies is troubling regardless of however small it may be. Delinquencies can be a indicator of financial trouble for some consumers, signaling that they are struggling to stay abreast of their monthly bills and having to make tough choices about which debts to pay. With approximately 110 million new credit cards in 2016 alone, there could be quite a few people walking around with debt they can no longer afford.
While credit cards can be effective financial tools, even minor bumps in the road can throw this type of debt into an out-of-control spiral. When paired with other difficult debts — such as medical bills, student loans and car notes — some in South Carolina might feel like they have no way out. While bankruptcy may not be able to discharge all of a person’s debt, it can usually help clear away overwhelming credit card debt, paving the way for more financial stability in the future.
Source: NBC News, “Americans have more credit cards – and more debt, says CFPB”, Herb Weisbaum, Dec. 28, 2017