Credit Card Delinquencies Hit New High

As the economy continues to sink deeper into recession, credit card delinquencies have reached a new record. This is the second month in a row that late payments on credit cards have reached a record. As consumers become increasingly concerned about their ability to meet obligations, it is no surprise that credit cards are falling in priority — usually behind such items as making the mortgage payment or buying groceries.

The effects, though, could be far reaching. Already, many credit card companies are restricting credit accounts. Available credit is being slashed, and the current delinquencies could mean an increase in the rate at which credit is being pulled from the market. (Some issuers are even offering their account holders money to close their accounts.) Indeed, concerns about credit card responses to rising delinquencies is prompting speculation that the next phase of the credit card crunch is likely to involve credit cards.

Your credit line may be affected. Keep an eye on announcements in your credit account statements, and note any changes to your available credit. You may not have as much leeway as you thought. Also, understand that any charges made prior to the imposition of a new credit line are not subject to over-the-limit fees. If you are charged fees on purchases made before the effective date of your new credit line, call your issuer to have the fees removed.

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