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Some may consider debt consolidation as defaults rise on cards associated with retailers
01/20/2010
One way a consumer may get into trouble is through credit card debt, regardless of the type of card they use.
A recent report from Fitch Ratings noted that there has been an increase in the number of credit card defaults tied to store-branded cards. The firm said that during the November collection period, charge offs on these types of cards increased 1.22 percentage points to come to 12.56 percent. Though that may be considered high, it is still below the record of 12.81 percent set in August.
However, the firm also said that store-branded cards that are more than 60 days late on payment declined .15 percentage points to rest at 5.22 percent. A decline in delinquencies could lead to a reduction in defaults. However, Michael Dean, managing director at Fitch Ratings, said the organization expects difficulties with these accounts to continue as unemployment numbers continue to be high.
Given the increase in defaults on store-branded credit cards, some consumers may be wondering what they can do in order to pay off debt. One option they may consider is debt consolidation, which may offer them the opportunity to reduce the amount they pay in interest.
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