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Americans are suddenly defaulting on their credit cards

Established Contributor

Americans are suddenly defaulting on their credit cards

Capital One, Synchrony, and the First National of Nebraska are leading for defaults on credit card defaults

 

http://www.msn.com/en-us/money/markets/americans-are-suddenly-defaulting-on-their-credit-cards/ar-BB...

 



EX 759, TU 764, EQ 743
|| NFCU CashRewards $16.5K || Discover IT $7.5K || NFCU Platinum $7.5K || Macy's $7.5K || CitiCostco $5.5K || Chase $5K || CitiDC $4.8K ||
Message 1 of 37
36 REPLIES
Valued Contributor

Re: Americans are suddenly defaulting on their credit cards

Just got ready to post this story - ya beat me to it Smiley Sad

 

Probably explains the AA and CLD's folks are experiencing as of late - thankfully I have not had and AA or CLD on any of my accounts. 

Message 2 of 37
Established Contributor

Re: Americans are suddenly defaulting on their credit cards

Between stories like this and the news about Dodd-Frank...something tells me things are about to get interesting.
Message 3 of 37
Regular Contributor

Re: Americans are suddenly defaulting on their credit cards


The sharp increase, the largest since 2009, is especially unusual given how strong the US employment market has been, Moody's noted. It suggests that American consumers haven't fallen onto hard times so much as banks have started to loosen their standards and issue credit more aggressively. 

 

 


Seems delusionally optimistic.  I'm confident that "strong employment market" is propped up by people who are simply no longer counted as unemployed because they gave up looking, and people who are working one or more less desirable lower paying jobs instead of a good one.  Maybe not "hard times" but not good ones either, and people want their former lifestyles back even if they can't really afford them.


Message 4 of 37
Regular Contributor

Interesting...CC defaults up significantly

Message 5 of 37
Contributor

Re: Interesting...CC defaults up significantly

I wonder how much of this is people defaulting for the first time ever? And how much of it is people who defaulted say back in 08/09 who never learned their lessons doing it all over again.
Message 6 of 37
Valued Contributor

Re: Interesting...CC defaults up significantly

For those of you wondering why Capital One is cutting your unused 50K limits down to 5K, now you know. 

 

Also makes sense that I can't get approved for Venture with scores around 700, when a year ago people in the 650's were getting 30K starting limits. 



Starting scores: 552 EQ, 570 TU, 558 EX Current scores (9/29/17): 746 EQ 721 TU 719 EX
Message 7 of 37
Valued Contributor

Re: Americans are suddenly defaulting on their credit cards


Glen_M wrote:

Seems delusionally optimistic.  I'm confident that "strong employment market" is propped up by people who are simply no longer counted as unemployed because they gave up looking, and people who are working one or more less desirable lower paying jobs instead of a good one.  Maybe not "hard times" but not good ones either, and people want their former lifestyles back even if they can't really afford them.


I agree. The chart and the phenomenon are interesting, but the article's view that we now have this rosy economy and low-low-low unemployment is delusional. Only prosperous city dwellers see a great economy. For the most part the rest of us aren't experiencing any such thing. I would take the article's view on the causes of this problem with a whole shaker of salt.

 

One good sign is that, unlike in 2006-2008, banks are taking preemptive actions like the AA we've seen reported here. The defaults may have been caused partly by looser lending standards, but the banks are tightening standards back up.

Message 8 of 37
Super Contributor

Re: Americans are suddenly defaulting on their credit cards


Glen_M wrote:

The sharp increase, the largest since 2009, is especially unusual given how strong the US employment market has been, Moody's noted. It suggests that American consumers haven't fallen onto hard times so much as banks have started to loosen their standards and issue credit more aggressively. 

 

 


Seems delusionally optimistic.  I'm confident that "strong employment market" is propped up by people who are simply no longer counted as unemployed because they gave up looking, and people who are working one or more less desirable lower paying jobs instead of a good one.  Maybe not "hard times" but not good ones either, and people want their former lifestyles back even if they can't really afford them.


+1

FICO8 EQ 725 TU 752 EX 736 Total revolving credit 454300
Message 9 of 37
Established Contributor

Re: Interesting...CC defaults up significantly


TheVig wrote:
I wonder how much of this is people defaulting for the first time ever? And how much of it is people who defaulted say back in 08/09 who never learned their lessons doing it all over again.

I'm leaning towards the later since the timing works of those 08/09 COs falling off for them to get credit again with clean reports more or less.

FICO 08 Scores (Oct-17): TU 810, EQ 813, EX 813

Message 10 of 37