With declining credit offers, payments could become higher priority
A 2009 survey by Securian Financial Group found that making timely credit card payments has dropped in priority by Americans struggling under the weight of the current economic crisis.
Similarly, a recent Rasmussen Report found that 25 percent of those surveyed said they were "somewhat likely" to miss a credit card payment over the next six months.
This type of exposure has credit card companies raising interest rates and lowering available credit to protect against mounting losses.
With many experts saying that credit card offers will decline as banks seek to avoid overleveraging themselves, and following the passage of the Credit Card Act of 2009, consumers may soon need to rethink that strategy in order to maintain what available credit they have left.
According to the survey, the number of people who consider short-term savings a priority has risen by 8 percent since the last survey nearly a year and a half ago. Unfortunately, that need to save has, to some extent, come at the expense of long-term financial obligations like credit card debt.
"Consumers are clutching cash and postponing debt reduction," commented Kerry Geurkink of Securian Retirement.
But a Bankrate.com columunist notes that many banks are scaling back existing credit lines, and other analysts have noted the overall decline of credit offers.
Taking a chance with your existing credit score in these troubled times could be the exact opposite of sound financial strategy, according to Bob Wexler of Public Savings Bank.
“Building good credit is critical at a time when credit is getting harder to obtain,” Wexler said.
According to the Securian study, 82 percent have some form of non-mortgage secured debt, a figure that has not decreased since 2007.
