Credit card companies and lending institutions are reporting there are less defaults on credit cards but they are finding that more and more cardholders are having trouble making monthly payments. Many credit card customers are becoming delinquent with their payments yet companies are reporting that there are less cardholders who are defaulting outright.
Credit cards and the credit industry are saying this drop in credit card defaults, although less than expected, isn’t cause for celebration. Credit cards have been used to prop up the finances of families in the past months and with credit card delinquencies on the rise there is sure to be another wave of credit card default unless something happens.
Again, credit cards were used to stave off financial burden for those who were suffering economic hardships and they are still being used in just that way, but the main cause for this need of credit is unemployment.
As unemployment rose so did the use of credit cards in the hopes things would get better sooner than later and the credit card charges could be paid off before any damage was done. However, with unemployment just now coming to the attention of the government after months of housing and banking aid, we see that the creation of jobs is the foundation on which all areas of the economy must be built.
No matter if the automotive, housing, banking, or the credit card industries improve over the short term they cannot survive without consumers and consumers cannot survive or spend without employment.
The credit card defaults have slowed for one of two reasons: people can pay off their credit cards but are still struggling in a gradually recovering economy or the first wave of defaulters who defaulted on credit cards as a result of job loss are gone and a new batch is growing.
Either way, it has been stated that Americans and the economy need credit to thrive, but when people turn to credit cards as the sole means of survival, essentially gambling that they will be able to pay off those credit cards, then we are led into our current state.
Living outside of one’s means is never the best way to go, but when someone is able to make a car or mortgage payment they do need good credit to obtain both. However, since unemployment has become such a blight on our nation many feel credit cards are a stay of execution from the guaranteed loss of things like their home or car, so it’s no wonder there is a rise in delinquencies on credit card payments and another round of predicted defaults on credit cards on the horizon.
Avoiding credit cards and taking out unsecured personal installment loans in South Carolina has become quite popular. South Carolina is a state that allows storefront payday loans but many are looking to avoid both payday loans and credit cards and one of the easiest ways to do this is to take advantage of personal loans. Before selecting a lender it might be a wise choice to improve a credit score and credit history over the course of time.