Christopher Todd Morrison, P.C.
Affordable Bankruptcy
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Credit card delinquencies on the rise

Major banks and credit card companies such as Capital One and JP Morgan Chase have reported that credit card delinquencies are up for the second straight month. This marks a reversal from a four-month run in which credit card delinquencies had been falling. It is likely that many Texas card holders have contributed to this trend.

In August, JP Morgan reported an increase in the credit card delinquency rate to 1.16 percent from 1.15 percent in July. Capital One reported a delinquency rate of 3.97 percent, which was up from 3.81 percent in July. The overall seasonally-adjusted delinquency rate for banks was 2.47 percent compared to 2.2 percent a year ago according to the New York Fed. The numbers are worth paying attention to because lenders have started to ease their requirements as the economy has improved.

This has resulted in borrowers with lower credit scores either getting credit cards or being approved for higher credit limits. However, an increasing number of people who have credit scores below 660 have seen their debts become serious delinquent cautioned the New York Fed. It was also noted that a lack of wage growth combined with interest rates rising again may be playing a role in higher delinquency numbers.

Individuals who are struggling with credit card debt may wish to file for bankruptcy. Filing for Chapter 7 protection may allow for a quick discharge of such debt while Chapter 13 cases allow for debt to be restructured over time. An attorney may be able to talk more about which type is best for a given client.

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