Credit Card Defaults Set to Spike
October 23, 2008 by Miranda Marquit
Filed under Finance
We’ve been so focused on the mortgage part of the current credit and economic crisis, that we have been neglecting a very large segment of debt lately: credit cards.
Right now, there are reports that the credit card default rate is set to spike. This is because as individuals find it harder to make ends meet in this economic slowdown, there is evidence that some things — like unsecured debt — are starting to move down on the priority list. Things like food are coming before credit card payments, and that means that credit card companies are going to start toting up the losses.
It is also important to note that it is a good idea to pay your home mortgage before you make payments on credit cards. That means that, when it comes down to it, credit cards are going to be last the list of obligations that many individuals are prepared to meet.
Because credit card debt represents a rather large portion of the total revolving debt in this country, it is likely that another credit market crisis could result from the upcoming rash of credit card defaults.
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