Many of America’s largest lenders are expecting to write off nearly 14% off of their bottom line due to the incredibly high default rates triggered by the current economic crisis. Bank of America recently reported that they are experiencing a 13.8% current charge off rate. With more charge-offs affecting the lenders bottom lines, credit worthy consumers are feeling the pinch in the form of higher interest rates, raised fees and reduced line of credits. All of which can ultimately lead to more defaults.
Even the most financially responsible person may end up in default when the economic tide turns against their favor. Although it is not pleasant, it is a survivable situation, and with calculated measures you can manage through these difficult times. If you are on the verge of defaulting on your credit card payment or already have defaulted on your credit card payments, a broad understanding of the situation can help you to deal with the situation better.
- Default is the act of simply failing to make a required minimum payment by the credit card bill date
- Credit card companies can put your account on default status even if you are just a couple of days late with the payment
- In turn, you would get saddled with a default penalty
If that is your case, you should pay your bill immediately, including the fee. However, if you feel that the fee was erroneously charged to your bill, call the credit card company to dispute your concern. The most important thing for surviving a default is by communicating with your credit card company immediately. If you are in a tight position, by letting the credit card company know you are aware of the delinquency of your credit card bill, providing them with a clear cut explanation, or even just letting them know the steps you are taking to rectify your error – is the only way to ensure that the default does not escalate into a bigger problem.