Two leading executives in the store credit card industry said they are nervous that when the federal $600-a-week bump for recipients of state unemployment benefits winds down July 31, pending Congressional action, credit card payments will decline substantially.
“People got forbearance on credit cards, mortgages and auto loans. Everything got pushed out,” Margaret Keane, CEO of Synchrony Financial, told CNN Business. “As forbearance and stimulus wears off, we’re definitely in a rockier place.”
Added Brian Wenzel, Synchrony’s Chief Financial Officer: “It’ll almost certainly get darker from here.”
Synchony, based in Stamford, Conn., lists retail clients including: Lowe’s, Amazon, American Eagle and Dick’s Sporting Goods.
The $600-per-week boost is popular among Congressional Democrats, who argue it’s needed to prevent further economic hemorrhaging. Their Republican counterparts have countered that a system that pays people more to stay home than they were making going to work or would make returning to work damages the economy and workers themselves.
President Donald Trump also shown antipathy toward the idea of renewing the $600-per-week bump.
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During the first months of the COVID-19 onslaught in the U.S., credit card debt declined among the country’s households, according to the Federal Reserve Bank of New York. The percentage of credit card borrowers listed as 90 days delinquent or worse declined marginally.
Mortgage, student loan and auto debt increased during the period, according to the New York Fed.
