Apr 25, 2020 - Health

Banks and credit card providers brace for their own coronavirus damage

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

Go deeper