Millions took advantage of financial hardship programs in April for credit cards and auto loans
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.