According to a recent report from the Federal Reserve Bank of New York, credit card delinquency rates are on the rise. This is particularly true among the young. In 2009, during the Great Recession, the Card Act made recruiting college students more difficult for credit card companies. As a result, fewer young people had credit cards. But during the past few years standards have eased, and this trend has reversed itself. About 52 percent of people in their twenties now have credit cards — as opposed to 41 percent in 2012. And of those, more than 8 percent were delinquent by more than 90 days in the first quarter of 2019. Young people’s share of credit card delinquency hasn’t been that high since early 2011.
Credit card interest rates are also on the rise, topping out at 16.91 percent. You’d need to go back to 1994 to find a comparable figure.
Sen. Elizabeth Warren (D-Mass.) has a plan to limit credit card interest rates to the highest lawful rate in the borrower’s home state. Sen. Bernie Sanders (I-Vt.) and Rep. Alexandria Ocasio Cortez (D-NY) have sponsored a bill limiting credit card interest rates to a high of 15 percent. The legislation is unlikely to pass. And the percentage of young people more than 90 days delinquent on their credit card debt is likely to rise.
If you’re a young borrower with an unsustainable amount of credit card debt, you ought to know that credit card debt is completely dischargeable under Chapter 7 bankruptcy. As a New York bankruptcy lawyer who has extensive experience with Chapter 7 bankruptcy, I can answer your questions and help you figure out whether bankruptcy is the best way for you to clear your debts and start over. If you’re thinking you might have to file for bankruptcy in New York, please feel free to contact me for a free initial consultation.
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