20 Million Credit Cards Were Closed Last Month
If you’re curious how bad it’s getting in the credit card world, a new report from Equifax might be a pretty clear wake up call.
Last month, banks closed a whopping 20 million credit card accounts, according to data from credit bureau Equifax obtained exclusively by Reuters.
The total number of credit cards has now fallen by 58 million from a July 2008 peak of 380 million cards, wreaking havoc on small businesses and consumers who rely upon credit.
Additionally, credit limits have slid by $425 billion from a July peak of $3.59 trillion to $3.16 trillion as of last month.
Meanwhile, card issuers are putting the brakes on new card applications, with the number of new bank cards issued in January and February off 38 percent from a year ago.
It’s no mystery why; last month, 4.7 percent of payments on bank-issued credit cards were at least 60 days behind, an increase of nearly 40 percent from the same period last year.
The good news is that those who continue to make on-time payments and keep balances low should be unaffected by the ongoing credit crunch.
Most of those seeing their credit card limits cut carry hefty balances without paying them down significantly, while many others have had their accounts closed simply due to inactivity.
If you have a credit card that you rarely use, but want to keep open for the credit score benefits, consider using it to pay a recurring monthly bill with automatic billpay.
(photo: smith)
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Posted Under: Credit News