According to Equifax, the delinquency rate on store-branded credit cards is 4.65 percent, which is the highest since the beginning of 2011. The delinquency rate was 4.08 percent in March 2017. Virginia residents should know that they must still pay down a store credit card even if the store goes out of business or files for bankruptcy. Missed payments are still being reported to the credit bureaus by the lenders providing those credit lines.
The higher percentage of missed payments can also be attributed to store cards being given to those with lower credit scores. Individuals may be having a hard time keeping up with their payments as the average interest rate for a private-label card is up to 25.5 percent on average. This is higher than the 16.73 interest rate for all other credit cards. Overall, there was $1.030 trillion in outstanding credit card debt as of January 2018.
However, there was a decrease in outstanding credit card debt to $1.027 trillion in March 2018. The increase in delinquent store credit card accounts comes at a time when household debt makes up about 10 percent of income. That is a relatively low figure, but individuals have also struggled to pay auto and other loans in recent years. Many people who have trouble keeping up with their payments are in lower income brackets.
Individuals who are struggling to pay their debts may wish to file for Chapter 13 bankruptcy. Doing so may make it possible to have credit card and other balances reorganized based on a payment plan that lasts for three or five years. An attorney may be able to help explain the other benefits of bankruptcy, such as the possibility of a stay from creditor contact while the case is ongoing.