US Finally Surpassing The Troubled Economy
The latest news from the US top lenders today says that credit card delinquencies and defaults have been dropping for the past months. There are various factors why this happened so even though the number of borrowers and loans has remained high and still increased. This increase, however, started to climb slower and experts have said that with this slower rate, the number of loans and borrowers would soon descend in an even faster rate.
Reports by these top US lenders have said that they, and other credit card companies, have been more selective as to who they give or approve their credit cards to. They said that only the primary borrowers are able to receive new offers from zero percent balance transfers to new credit card accounts. The rate of defaults is also affected by the country’s high unemployment rate. The reformation of credit cards has helped in lessening the number of credit card payment delinquents and defaults. Credit card companies have now had to apply payments over the minimum payment which increases the number of incentives for their credit card customers.
In addition to these, credit card customers have now became aware on how large they spend with their credit card. Many Americans have now focused on spending less and on lessening their credit card debts. Many credit card holders have now seen the importance of using cash and debit cards as opposed to credit cards. Now, these people’s main concern is to pay their debts and lessen the usage of their credit cards.
Just this May, credit card companies have said that for the fifth month in a row the percentage of credit card defaults have decreased significantly and continuously. Capital One, the first bank which reported the major decrees of their credit card defaults, filed their report to their U.S. Securities and Exchange Commission. They stated in their report that from the 9.68 percent of defaults in April in has decreased .20 percent in May, which only had 9.48 percent. Aside from the bank’s decrease in it credit card default they also reported that the number of delinquencies in a 30 day payment has also dropped. From last April’s 5.07 percent it went down to 4.8 percent in May.
Other credit card companies have also reported this decrease from May to April. However, only Discover Financial has reported an increase in their credit card defaults. But, even though there has been an increase in their defaults, the bank reported a decrease in the number of their credit card delinquents.
