Credit card debt

One of the factors that led to the financial condition we are now reeling under is debt. This includes credit card debt too. Credit card defaults escalated in March as unemployment levels increased too. Surprisingly, reports furnished by American Express state that more number of credit cardholders are now paying their credit card bills on time. This in turn caused shares of the charge card giant to go up in the credit card industry.

AmEx is the largest operator of charge cards in the U.S. as far as sales volume is concerned. The charge-off rate increased from 8.60% to 8.80% in March. Rate for loans that were behind on payment for 30 days dropped to 5.1% from 5.3%. The delinquent accounts may be an indication of default accounts in future.

A study conducted recently indicates that students are equally responsible for contributing to credit card debt. It has also been observed that most of the credit card companies target college going students. As per reports furnished by Sallie Mae, the credit card debt carried by a student has reached alarming levels. Amount of debt on an average is USD$3,173 as compared to 2004 when the average debt amount was USD$2,169.

The federal government has introduced certain regulations that hope to bring about changes in the modus operandi of the credit card industry. The new regulations are more consumer friendly and hope to minimize complaints of the credit cardholders.

Of late consumers have complained that the credit card issuers have altered their payment policies due to which the number of consumers defaulting in their credit card payments have increased manifold. These changes were made by the credit card companies without notifying the consumers. As such if there was any change in the minimum payment, available credit limit or interest rate, the same was not communicated to the credit cardholders.

In a nutshell, the new credit card regulations introduced by the fed makes it mandatory for the credit card issuers to give a “reasonable” time to the consumers so that they can pay back credit card debt. In case the credit card issuer doesn’t accept payment on a particular day (weekend or a holiday) and a consumer makes payment the following day, it will not be treated as late payment.