PHOENIX (3 On Your Side) -- The credit card industry its tightening its belt as the economy reacts to the coronavirus emergency, according to industry analysts.
Ted Rossman of CreditCards.com said the pandemic is proof that circumstances can change in an instant, and what borrowers may have considered to be manageable debt, suddenly puts them in precarious financial situations.a
"Credit card companies are really nervous about the state of the economy, the state of the job market," Rossman told 3 On Your Side. "Even in the last couple weeks, there's been a big change in terms of lending standards, and they've gotten a lot stricter."
According to a new survey by CreditCards.com, 59% of credit card holders in the U.S. went into the coronavirus pandemic already saddled with credit card debt. Of the 110 million borrowers who were carrying a balance, a majority said they were relying on credit cards to get by, and had been carrying that debt for more than a year.
Financial experts say the average credit card debt in the U.S. is a little more than $6,500, but for some people, it may be higher than that because of the holidays.
Rossman said under normal circumstances, he would suggest that consumers get a balance transfer card to help tackle debt. Those cards can come with a 0% interest rate for up to 21 months, but Rossman says those offers are drying up quickly.
"Right now, to get one of these more desirable balance transfer cards, I think you need a credit score in the 700s at least, and you also need to have a stable employment situation," he said.
Think a few late credit card payments aren’t a big deal? Think again. The repercussions can be widespread, negatively impacting your financial goals and preventing you from securing future credit or loans.
CreditCards.com said 61% of credit card holders said they went into debt to cover necessities including medical bills, child care, and groceries, while 31% said they racked up debt on non-essential shopping and vacations.