A flood of delinquent credit card debt

[Aug 22, 2010.]

 

It seems like many Americans have forgotten what an excellent credit score means for their future. Or, maybe they've just chosen to live without one. According to new information from the New York Federal Reserve, serious delinquencies (accounts 90 days late or more) are up 3.1 percent to $986 billion. Are people just walking away from their debt?

Fewer credit card accounts

The number of open credit accounts has gone down about 111 million since June 2009. The majority of credit accounts closed in the past two years have been credit cards. In Q2 2010 alone, 4 million credit card accounts were closed. Since the peak in Q2 2008, the number of credit card accounts has dropped 23.2 percent.

If this was just about paying off debt, these numbers would be very positive. But many of the closed accounts have been charged off for lack of payment. That means the bank who issued the credit card has declared the debt noncollectable and turned it over to a collection agency. The collection agency then harasses the account holder day and night to attempt to collect a portion of the debt.

Should you walk away?

You may have relatives or friends who have walked away from debt. Statistics show that some people have grown weary of paying off the debt they took on to purchase an asset that has since lost value. Their credit will be ruined for years to come.

However tempting it may be to stop paying your bills, the consequences could be damaging for many years. Someday, the economy will turn around and you will want to be in a position to benefit from any opportunities that will come your way. From new job opportunities to new car loans, your credit score matters.

Coming up with a manageable way to deal with your credit card debt before it is out of control will benefit you and the economy. Free debt consolidation advice is readily available. If you consolidate credit card debt into one manageable payment, that is often all it takes to weather the storm.

There is no good reason to go it alone. Don't let your credit score go down the drain because you are too intimidated or overwhelmed to deal with your credit card debt issues. Take action today and speak to a debt relief specialist who is truly interested in helping you. You'll be glad you did.

 

About Author:

Renee Morgan has been a loan officer for over eighteen years. She is also a freelance writer and guest expert for radio and TV.