Millions of people in America have failed in their credit card and auto loan payment, which clearly reflects how hard coronavirus has hit the economy. Nearly 15 million credit cards are placed in “financial hardship” programme, which let the borrowers to stop making payments temporarily.
This has been disclosed through TransUnion data that was widely reported in the media. About three million auto loans are reported to be placed in hardship programs. The default is reported at a time when more than 35 million people in the United States are without work.
The reports said that about 17 per cent of credit card owners owe more than 10,000 dollars each on their Cards. As per records, more than 15 per cent of card holders have between 2,500 dollars to 9,999 dollars debt. Another 17 percent carry more than 10,000 dollar of debt. The reports also said that several Americans have debt on multiple credit cards. It said that about 20 per cent had debt on two to four credit cards and more than 4 per cent had debt on five or more cards.
With the crisis hit hard, most of the debtors have come up with hardship programs that allow borrowers to skip some payments without any penalty or damage to their credit score. Moreover, the lenders and credit card owners believe that the financial crisis was only temporary and the borrowers would repay the debts at the earliest. Well, several of these accounts will go into default if the economy does not rebound quickly.
With the number defaulters increasing, several of the credit card insurers have come up with many limitations.
