BusinessNon-payment on credit card debt and loans will rise to 2010 levels...

    Non-payment on credit card debt and loans will rise to 2010 levels in the US, according to TransUnion

    High prices and the higher cost of credit with high interest rates will finally take their toll on consumers in the United States over the next year, when it is expected that non-payment of credit cards and personal loans touch its worst moment in a decade.

    This is alerted by a new report published by the TransUnion consumer credit reporting agency, in which delinquency rates not seen since 2010 are anticipatedmainly due to changes in consumer behavior.

    According to the report, these changes are attributed to the high prices of products and services caused by historical inflation and the increases that the Federal Reserve has carried out seven times throughout the year. as a strategy to control inflation.

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    “Rapidly rising interest rates and stubbornly high inflation, combined with fears of a recessionrepresent the latest in a series of significant challenges that consumers have faced in recent years,” said TransUnion Vice President and Director of Research and Consulting, Michele Raneri.

    According to the report, called the Consumer Credit Forecast for 2023, the lack of payment considered “serious” for credit cards, will rise to 2.6% next yearfrom 2.1% in 2022.

    More noticeable will be the default rate for unsecured personal loans, products with high financial costs, which will reach 4.3%, from 4.1% this year, according to the TransUnion report.

    Raneri noted that the expected increases in credit card debt and personal loans should not be surprising, since both are credit instruments with high popularity among consumers.

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    He added that due to the difficulties that consumers have faced, the delinquency rates in both financial instruments have increased steadily in the last two years.

    The TransUnion executive highlighted that, in this process of greater non-payment, the money that households received as stimulus checks during the last two years also played a role.

    “One contributing factor to that is that so much stimulus money was provided to consumers that they were able to use, that I think they probably got used to having money; But when the time came when they had used up enough and started to deplete those savings, they couldn’t pay off all their credit cards like they used to,” he added.

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    Finally, the TransUnion report indicates that the demand for loans will remain strong during the next year and warns an increase in home loans and to buy cars during 2023.

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    Source: La Opinion

    This post is posted by Awutar staff members. Awutar is a global multimedia website. Our Email: [email protected]


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