Lefkovitz & Lefkovitz
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Defaults increase for store credit card payments

For many people in Nashville, store-brand credit cards have led to debt that is increasingly difficult to manage. Delinquency rates on these types of cards have reached their highest level in seven years, according to Equifax, the credit reporting agency. The percentage of accounts in default for at least 60 days has risen to 4.65 percent, an increase from 4.08 percent in March 2017. This is the highest level of default on these types of credit card accounts have seen since early 2011.

Equifax said that some consumers have refrained from paying off these credit card debts after some of the retailers who branded the cards went out of business or declared bankruptcy. However, despite the failure of some of these retail companies, the lenders that backed their credit cards are continuing to pursue and collect the store card debts. The creditors of these corporations are often particularly eager to collect any outstanding debts that they can.

There are other factors that have led to the growing level of unpaid debt related to store credit cards. Many people have received these cards despite an income level and credit history that would not support their ability to repay the bills. Store cards are known for being easier to receive than traditional cards. Even more, they come with hefty interest rates that can add extra weight to the growing balance on the card.

Store cards are only one part of the growing outstanding credit card debt held by people across the United States. Many people struggle to pay off these bills and face an escalating cycle of late fees and collection calls. A bankruptcy lawyer may help people explore options to find relief for their unpayable debts, including Chapter 13 bankruptcy, in which a person develops a payment plan to address outstanding debts while protecting their assets.

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