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Debt management plan may help those that were part of delinquency-rate drop
By Peggy Stillwell on Jul 2nd, 2010
One reason why consumers may consider an option like a debt management plan is because they can't keep up with their bills, although a recent report indicates credit card delinquencies declined in May.
According to Fitch Ratings, early-stage delinquencies declined to 5.27 percent of credit card accounts. Debt that was at least 60 days late on payment also fell and made up 4.01 percent of cards, which is a 17-month low.
However, charge offs - credit card debts that lenders no longer expect will be settled - did post a slight increase, up 0.03 percentage points to 11.13 percent of accounts. The decline in delinquencies could indicate that future default rates will fall.
"Employment trends remain vital to any meaningful and sustained improvement taking hold," Fitch managing director Michael Dean said.
Consumers who are having problems with their credit cards may consider seeking out a debt management plan, which can help them get their payments back on track. People who do so may find that their interest rates are lowered, making reducing what they owe more feasible.
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