It appears that more American consumers are late in paying their credit card bills. The organization known as CardTrak reports that the percentage of customers who are tardy in making credit card payments is at a 3-year high.
The trend is actually a money-maker for credit card companies. That’s because credit card issuers earned $18.1 billion in penalty fees in 2007, up from $17 billion in 2006.
Credit expert John Ulzheimer, who wrote the book You’re Nothing But a Number, states that, although consumer credit scores may be falling, credit scores are actually our friends.
Ulzheimer says that credit scores can reflect changes in credit management. Therefore, if you are improving in paying your bills, your score will reflect that fact, even if there is still derogatory information on your credit report.
Ulzheimer, who has 16 years of experience in the credit card industry, notes that it doesn’t matter whether you’re the victim of the subprime crisis or if you are currently on government assistance. A credit score can be the great equalizer, showing your credit worthiness even in tough times.
That means that you should remain optimistic about your credit, despite changes in your financial fortunes. Even if you have had trouble paying your bills lately, it doesn’t mean that your credit score will be abysmal for the rest of your life. If you can regain your financial footing, your credit score will improve.
One of the big reasons that people may be falling behind on their credit card bills is the housing crisis.
Homeowners who have adjustable-rate loans are feeling the pinch and, in an effort to keep up with their monthly mortgage payments, they may be letting credit card bills slide. In addition, unemployment is up, meaning that credit card customers may not have the incomes they used to.
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