Credit Card Delinquencies on the Rise

[bjl584]

Credit card losses rising at fastest pace since Great Financial Crisis (cnbc.com)

[disneysteve]

Gee, an increase in losses historically follows a period of increased lending. Imagine that. Perhaps there's a lesson there. Maybe some day lenders will learn something from this glaringly obvious pattern and stop overly loosening lending criteria just to get hit with higher defaults causing tighter lending criteria, only to then repeat the cycle again and again and again. This isn't rocket science. As they say, the definition of insanity is doing the same thing over and over but expecting a different result.

[kork13]

Gee, an increase in losses historically follows a period of increased lending. Imagine that. Perhaps there's a lesson there. Maybe some day lenders will learn something from this glaringly obvious pattern and stop overly loosening lending criteria just to get hit with higher defaults causing tighter lending criteria, only to then repeat the cycle again and again and again. This isn't rocket science. As they say, the definition of insanity is doing the same thing over and over but expecting a different result.

Oh, but in the meantime, their profits far outweigh the defaults & other losses, so why do anything different? It's a cost of doing business.

It's sickening to watch, but not hard to understand the motivation.

[disneysteve]

Oh, but in the meantime, their profits far outweigh the defaults & other losses, so why do anything different? It's a cost of doing business.

It's sickening to watch, but not hard to understand the motivation.

That actually makes a lot of sense. Defaults are very low relatively speaking so even if they increase a bit, the lenders are still doing very well. They don’t care if 4% don’t pay because that means 96% do.

[mumof2]

In australia it can be so hard to get credit for a lot of things....and I don't know anyone who has ever had more than 3 CC here...and they were very well off...

[disneysteve]

In australia it can be so hard to get credit for a lot of things....and I don't know anyone who has ever had more than 3 CC here...and they were very well off...

Yes it’s very different there. My Aussie friend and I have had that conversation. In the US, they’ll give credit to virtually anyone. No income? Not a problem. Here’s a credit card. Lenders are notorious for giving credit cards and car loans and mortgages to people who can’t possibly afford them.

[Fishindude77]

The super low interest rates allowed many to get into really nice homes they would not have been able to otherwise. Now inflation has significantly increased necessities and daily expenses, so there is no "extra money" at the end of the month to pay for anything extra.
A surprise big bill or expense comes along and they have no way to pay it other than the credit card. Probably going to see quite a bit more of this as well as foreclosures if the current inflation and energy costs don't get tamed down a bit.

[ua_guy]

Interest rates on cards are going up. I just received updated terms and an increased interest rate on my primary card. They can eat their hearts out...I've never financed a penny on that card, but get 1-3% cash back.

[disneysteve]

Interest rates on cards are going up. I just received updated terms and an increased interest rate on my primary card. They can eat their hearts out...I've never financed a penny on that card, but get 1-3% cash back.

I have absolutely no idea what the interest rate is on any of our cards. Could be 99%. Wouldn’t make a difference to us.

[LivingAlmostLarge]

Me too. I'm unsure what rates are. haven't ever looked.

[mumof2]

Yes it’s very different there. My Aussie friend and I have had that conversation. In the US, they’ll give credit to virtually anyone. No income? Not a problem. Here’s a credit card. Lenders are notorious for giving credit cards and car loans and mortgages to people who can’t possibly afford them.

yes and I am thankful that they don't here as so many people I know would get them and never pay them off....some already get into trouble with payday loans...those things are horrible