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Credit card defaults rise with job losses, households struggling as economy weakens
Topic Started: 30 Sep 2013, 10:30 AM (1,057 Views)
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Credit card defaults on the rise along with job losses

September 30, 2013
Clancy Yeates

A growing number of Australians are failing to pay their credit card bills, in a potential warning sign more households are struggling with their finances as the economy weakens.

Figures from credit reporting agency Veda show the number of customers defaulting on their credit cards has increased steadily throughout the year, rising by 15 per cent in the year to August.

The company, which holds some 16 million consumer credit files, says there has been a year-on-year rise in defaults in almost every month since January, the trend worsening in the last few months and spiking at 29 per cent in July.

A default occurs when a bill of more than $100 is not paid within two months.

Banks and other businesses that extend credit to households, such as utilities, are also calling in the debt collectors more frequently.

Debt collection agency Dun & Bradstreet said the number of consumer debts referred to it rose almost 5 per cent in the June quarter, on top of growth of more than 15 per cent in the March quarter.

Failure to pay a credit card debt is often the first sign consumers are struggling with expenses and the trend could be a result of rising unemployment, which is at a four-year high of 5.8 per cent.

However, it is at odds with a falling number of people defaulting on their home loans, which are a much larger source of household debt.

Read more: http://www.smh.com.au/business/credit-card-defaults-on-the-rise-along-with-job-losses-20130929-2umio.html
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doubleview
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Not good, another smoking gun!

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mango66
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Why are credit cards interest rates so high.? Wouldnt be the banks gouging to help cover some of their upcoming losses through increasing mortgage default.?
Mine is 22% or something. The joys of frequent flyer . Gets paid on time everytime. Fuck those arseholes.
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MMM
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So after losing your job , the money stops flowing in and eventually runs out, then what, you use your credit card to pay your bills,utilities and mortgage. It says the the debt collectors are now being called in reguarding overdue utility payments, what are these, power bills, water rates , council rates. So people have been discarding utilities to pay for mortgage and rents with their credit cards. Now they are not only defaulting on utilities but on their credit cards, whats next, selling of personal items and belongings to cover bills such as rent ,mortgage and food, still discarding utilities and pleding hardship. unlike credit cards and utilities, mortgages get paid first and dont show up as defaulting until 90 days or so in arrears.

So once you,ve maxed out your credit card to pay your rent and mortgage while discarding utilities, then sold of your personal possesions to pay your rent and mortgage, whats left now to pay your rent or mortgage, which wont show up until some months after these, not only becuase they dont get recognised as defaulting until its many months later but becuase these were still being paid as the credit cards were being maxed out while then selling personal posessions. Thanks to the governments mindless pollicies and large corporations like banks or most busisinesses outsourcing jobs overseas to keep themselves and shareholders happy. great work, exactly how the US does things. we simply mirror there ways , and that way is self destruction. As bp would say ,get used to the new normal. what ever that is. I noticed the US is having a government shutdown, are the cracks getting wider, some people like to tell me how their economy is improving. yes , just gets better by the day.

If it was improving, would this shutdown be happenning, would they not have tappered from their over 1 trillion money printing scheme last month , when theytold us they would, would they be about to hit the debt ceiling again, would they need to raise it again, would they have almost 48 million people on food stamps and climbing at a rapid rate daily. blah,blah,blah ,the list goes on........
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