Millions took advantage of financial hardship programs in April for credit cards and auto loans
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The number of borrowers not making payments on their credit cards and auto loans rose by thousands of percentage points in April as nearly 15 million credit cards and 3 million auto loans were placed in financial hardship programs.
The state of play: The numbers have surged from March, when less than 0.01% of credit cards and about 0.6% of auto loans were in the programs, according to data from credit reporting agency TransUnion.
Yes, but: The programs allow borrowers to temporarily stop making payments, suggesting voluntary elections rather than missed payments.
The big picture: TransUnion notes that its measure of consumer liquidity has increased as forbearance programs reduce monthly minimum payment obligations and free up capital for Americans.
- The company also notes that credit card balances are decreasing as consumers reduce spending and make larger payments.
- Credit scores generally have been stable with overall credit ratings actually increasing with fewer consumers in the subprime risk tier.
Between the lines: Mortgage delinquency rates declined slightly, with 94.4% of loan holders current in April, up from 93.7% in March, and the foreclosure rate has ticked down from March by 9.7 percentage points.
Go deeper: "Astronomical" U.S. debt from coronavirus measures will reshape the Treasury market
