Apr 25, 2020 - Health

Banks and credit card providers brace for their own coronavirus damage

Orion Rummler

A credit card machine catching on fire — Illustration: Lazaro Gamio/Axios

Millions of Americans are skipping credit card payments in the face of mass unemployment caused by the coronavirus pandemic, the Wall Street Journal reports.

What's happening: Card issuers including Capital One, Discover and Synchrony are letting borrowers miss payments for a month or more, waiving late fees and forgiving some of their balances — but delinquencies are still expected to soar this year, WSJ reports.

Synchrony and Discover say they have enabled hundreds of thousands of borrowers to defer payments, including credit card customers.
Capital One says 1% of active card accounts are now in deferral programs.
Citigroup, Synchrony and Discover are lowering spending limits and closing cards that haven't recently been used, as consumers under stay-at-home orders avoid travel and shopping.

The big picture: More than 26 million Americans have filed jobless claims in recent weeks, meaning unemployment is likely already at Great Depression-era highs.

The bottom line: "As the economy spirals, credit-card payments are one of the first places where the effects will show up," WSJ's AnnaMaria Andriotis and Orla McCaffrey report.

Go deeper: The states having the most trouble with credit card debt

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Banks and credit card providers brace for their own coronavirus damage

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