Are you still able to make payments on your credit cards? Would you continue to use your credit cards if you lost your job–and how would you avoid defaulting on your credit card payments?
Currently, about 1 in 10 credit cards are NOT being paid.
U.S. Credit Card Defaults Reach Record Highs in April, with Citigroup and Wells Fargo posting double digit loss rates. “U.S. card credit quality continues to struggle,” John Williams, an analyst at Macquarie Research. Citigroup -a big issuer of MasterCard cards- reported its annualized charge-off rate rose to 10.21 percent in April from 9.66 percent in March. In addition, Wells Fargo said its charge-off rate increased to 10.03 percent from 9.68 percent. (Source.)
U.S. “core” unemployment—currently at 8.9 percent (although actual unemployment is much higher)—is expected to exceed 10 percent as the country endures its ongoing recession.
Map of Job Losses: http://tipstrategies.com/archive/geography-of-jobs/?ref=patrick.net
Bottom Line: Mortgage defaults and credit card defaults are both currently running at about 10% and are increasing in lock step with increasing unemployment.