First Quarter 2009 Showed an Increase in U.S. Credit Card Delinquencies

Due to the economic climate in the United States, there was no surprise when hearing that the start of 2009 was highlighted with a near record breaking delinquency rate on credit cards. According to the American Bankers Association (ABA) the main cause that drove this factor was the record breaking amount of individuals who are now unemployed. Stats show that during the first three months of the year more than two million people lost their jobs, which by far makes up more than any other time period since the recession began.

Many economists agree that the main cause of delinquencies is that of job loss. Without a means to make payments on bills, credit cards are generally one of the first things that cardholders will miss payments to ensure payments are made elsewhere. So until companies start hiring again and the economic state of the United State turns around credit card delinquencies will continue to rise, and have. According to data that was released not to long ago, the month of May showed the highest amount of credit card defaults for almost all of the nation’s top credit card issuers.

In many cases the first quarter of 2009 was just the tip of the delinquency “ice berg”, and has gotten worse and economists have yet to see a change in the foreseeable future. Hopefully this all will change sooner than later as many credit cardholders are barely able to make ends meet and need to provide for themselves and their families.