ATLANTA—Delinquency rates on store-branded credit cards have reached a seven-year high, possibly signaling broader troubles for household debt down the road.
The share of private-label credit cards with accounts at least 60 days delinquent is 4.65%, up from 4.08% in March 2017, Equifax said.
“That's the highest since early 2011. Equifax blames the trend in part on consumers who mistakenly believe they can avoid paying their credit card bills when retailers go out of business, declare bankruptcy or close local stores,” USA Today noted.
“This is a huge mistake as the lenders behind the private-label cards are still reporting to credit bureaus, and the creditors to the retailer are keen to collect any outstanding accounts receivable toward their outstanding debts,” Amy Crew Cutts, chief economist of Equifax, told USA Today. “The decision not to pay on these cards in the hopes that the retailer will forget them will haunt these consumers for a while and will impact their ability to take out credit in the future.”