Upcoming holidays may mean late payments for credit card holders
It is tradition, it seems, to spend a lot during the holidays. Many Georgia residents rack up huge grocery bills for Thanksgiving dinner and shell out boatloads of cash for the perfect gifts for friends and family members. While purchasing the best ingredients and over-the-top gifts may feel good at the time, it often leads to credit card debt.
Americans slipped on credit card payments last quarter — attributed in part to back-to-school spending — and experts project it will happen again in the last quarter of 2013 because of holiday spending.
For statistical purposes, late credit card payments include those that are 90 days or more past due. In the third quarter of this year, late payments rose from 1.27 percent to 1.36 percent. Despite the rise, this is still very low compared to rates in recent years. Since 2007, the average rate for late credit card payments has been roughly 2.2 percent.
Of course, part of the reason late-payment rates are so low is that consumers are more conservative with their spending after a difficult few years during the Great Recession. In fact, people across the country are depending less on credit cards.
When you have the means to avoid using a credit card, it may be a good financial choice to do that. However, not everyone is in that position. While the worst of the recession may be over, many people continue to struggle with circumstances like job loss and illness that make it difficult to avoid credit card debt. When debt becomes overwhelming and even debilitating, it may be wise to consider bankruptcy.
Source: USA Today, “Credit card late payment rate rises slightly,” Alex Veiga, Nov. 20, 2013