Credit Reporting Agency Predicts An Increase In Credit Card Delinquency In 2023
The economic hardships that have characterized the past three years do not seem to be letting up any time soon, but predicting what will happen next in the economy is an inexact science. Too many unexpected events could cause obstacles or opportunities that neither consumers nor professional economists could have guessed. The credit reporting agency TransUnion recently issued a report with its predictions about consumer credit and consumer debt for 2023. In summary, it predicts that the problems of 2022 will continue in 2023, with credit card debt and other types of consumer debt becoming slightly higher on average than they are now. Anything is possible, however, and if you are trying to get out of debt, it is a better idea to focus on your own finances than to worry about what everyone else is doing. If you are trying to decide whether to continue chipping away at your debt or to try a bigger intervention, such as filing for bankruptcy, contact a Boca Raton debt lawyer.
What Is Credit Card Delinquency?
One of the key predictions in the TransUnion report is that the rate of credit card delinquency will rise to 2.6 percent, which would be the highest rate of credit card delinquency since 2010. Currently, 2.1 percent of credit card accounts nationwide are delinquent. A credit card account is considered delinquent if more than 30 days, but not more than 90 days, have gone by since the account holder most recently made a payment. If the credit card issuer has not received any payments in more than 90 days, the account is in default; at this point, the credit card company usually closes the account, and if the consumer still doesn’t pay it, the credit card company can send the unpaid amount to a collection agency.
Other Predictions About Consumer Debt
Delinquency rates on personal loans were at 4.1 percent at the end of 2022, but the TransUnion report predicted that they will rise to 4.3 percent by the end of 2023. The report predicted, however, that auto loan delinquency rates will be lower at the end of 2023 than they currently are.
The report attributes the rise in credit card delinquency rates to a rise in the cost of most consumer goods, combined with a rise in credit card interest rates. Not only are everyday products so unaffordable that you can only pay for them with a credit card, but the credit cards themselves are becoming unaffordable. With nearly two thirds of Americans living paycheck to paycheck, including some whose household income exceeds $100,000, it is a perfect storm for credit card delinquency. Despite this, slightly over half of Americans are optimistic about their financial future.
Work With a Debt Lawyer to Make Your Finances Match Your Optimism
A South Florida debt lawyer can help you take a realistic view of your credit card debt and other consumer debt and weigh your options for paying it off. Contact Nowack & Olson, PLLC in Boca Raton, Florida to discuss your case.