In recent months, many consumers have worked hard to reduce debt and have increased the rate at which they pay their credit card debt on time, but now experts believe that trend will reverse in the near future.
Since the end of the recent national recession, the rate at which credit card lenders saw borrowers fall behind on payments or have their accounts written off as being uncollectable has plummeted, but as rates reach or approach historic lows, many experts now caution a correction may be in the offing, according to a report from the Wall Street Journal. However, it's simply a matter of the rate of improvement being unsustainable, rather than any great shift in consumer behavior.
After all the improvements seen in the last year or more, charge offs and delinquencies are expected to tick upwards over the next few quarters, and then move in concert with typical seasonal fluctuations, the report said.
Many consumers were able to improve the rate at which they paid down their outstanding credit card debt during the recession thanks to more conscientious bill payments and controlled spending.