Late credit card payments at record high

Several major credit card companies – Capital One, American Express, Discover, Chase and Bank of America – reported a rise in late customer payments in September. This is the first time since February 2009 that so many major card companies have all had customers with trouble paying their bills for more than 30 days.

Capital One Financial Corp. saw late payments rise to 3.65 percent of balances from 3.43 percent in August. American Express Co. saw late payments rise to 1.5 percent of balances from 1.4 percent. Discover Financial Services’ rate, went from 2.5 percent to 2.6 percent. Chase jumped to 2.53 percent, up from 2.48 percent. Bank of America’s rose to 3.99 percent from 3.96 percent.

With this increased rate in delinquent payments, many analysts are concerned that even these small changes indicate a growing trend of people falling behind on their bills. Unemployment remains above 9 percent.

According to the Federal Reserve, despite the increase in late payments the industry-wide card default rate is on a downward trend. It was 5.6 percent at the end of second quarter 2011; nearly half of the previous year’s rate during the same quarter (10.96 percent). This seems to indicate that although the late payments are increasing, credit card holders aren’t defaulting completely on their debt.

There are several ways that credit card holders can avoid late payments. Consider the following tips is late credit card payments are a problem for you:

• Track your bills on a calendar. Or pick one day a month to pay all of your bills. Keeping tack of when your bills are due on an automatic calendar will help you remember when things are coming do.
• Set up auto-pay and get your bills debited directly. Most credit card companies let you set up auto reminders and auto-pay options. This is a great option for those who know they will have a balance to pay off a bill but have trouble remembering.
• Track how much you are putting on your card. Budget for the bill the month before in order to ensure you will be able to cover your expenses. This is a great tactic for anyone who has been having trouble meeting monthly payments.
• Track the bills as they come in. Sometimes you can miss a bill that should have been sent, due to the credit card company’s error. If you have been charged a late fee for a bill that has not been sent follow up with the credit card company and ask them to waive any penalty fees.