Center for American Progress

Warning: Credit Card Practices Can Be Detrimental to Your (and Their) Health
Article

Warning: Credit Card Practices Can Be Detrimental to Your (and Their) Health

Here is another example from the list of “things that we saw coming, but nobody cared.” Credit card companies are suffering from record default rates. In the fourth quarter of 2008, credit card companies charged off—declared as uncollectible—a whopping 6.3 percent of their debt. Aside from a fluke spike in the data in the first quarter of 2002, this was the largest charge-off rate since the Federal Reserve began collecting these data in 1980.

Here is another example from the list of “things that we saw coming, but nobody cared.”  Credit card companies are suffering from record default rates. In the fourth quarter of 2008, credit card companies charged off—declared as uncollectible—a whopping 6.3 percent of their debt. Aside from a fluke spike in the data in the first quarter of 2002, this was the largest charge-off rate since the Federal Reserve began collecting these data in 1980.

Interestingly, these record setting losses for credit card lenders come after the punitive changes to the bankruptcy code were supposed to weed out the “deadbeat” borrowers and lead to lower default rates. Apparently, things did not work out as planned.

Read more here.

The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.

Authors

Christian E. Weller

Senior Fellow

You Might Also Like