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Many people with credit cards are expected to face severe credit card delinquencies this year, according to a TransUnion Consumer Credit Market report. By 2023, credit card serious delinquencies, commonly defined as more than 30 to 90 days late, are expected to rise from 2.1% to 2.60%, the highest level since 2010. It is also expected personal loan delinquency rates to rise to 4.3% from 4.1%.
Despite everything there are some favorable points in the report. Auto loan delinquency rates are expected to drop in 2023.
If you don't pay your credit card bill on time, your account is considered "delinquent" and if the past due balance is not paid within 30 days, your credit score will be negatively affected. Going 90 days without paying your credit card could mean closing it and sending your debt to collection agencies, which would severely damage your credit score.
One of the main reasons many people are carrying a balance on their credit cards, and in turn unable to pay it off, is because inflation, multiple interest rate hikes, and rising unemployment have put pressure on consumers. budgets. With the average credit card APR at 21.68% for new offers and 19.07% for existing accounts, it's easy to see how payments add up over time.
Michael Hershfield, founder and CEO of Accue Savings, says, “Buy-Now-Pay-Later platforms make it easy for customers to inadvertently overspend. As a result, many customers are facing a silent buildup of debt as they miss payments and rack up late fees.”
Paying off your credit card debt and avoiding a serious delinquency, especially in the face of inflation, can be difficult. But these tips on how to pay off credit card debt can help.