Unexpected medical expenses and unemployment are some of the most common causes of increases in credit card debt. Consumers often use bankruptcy to get out from under debts with high interest rates. Appleton readers may be interested in the following report on credit card debt.

TransUnion released a report on Feb. 20 that deals with credit card payments during the fourth quarter of 2012. This report showed that the rate of credit card payments that were overdue by at least 90 days was 0.85 percent during this period, compared to a rate of 0.78 percent for the fourth quarter of 2011.

A vice president of TransUnion stated that much of the increase in late payments from October to December was due to the annual increase in spending during the holiday season. Credit card holders typically begin catching up when the holiday bills arrive in January by using their annual bonuses and tax refunds.

Credit card debt may be more difficult to pay off in 2013 because a reduction in payroll taxes for Social Security ended 2012. The Internal Revenue Service also began issuing refunds later than usual this year. TransUnion predicts that the rate of credit card delinquency will decrease to 0.81 percent during the first quarter of 2013.

Credit card holders should not wait until they are in default on their payments before taking action. High credit card debt can increase interest rates and result in wage garnishment.

Source: Associated Press, “Average credit card debt falls, late payments rise,” Alex Veiga, Feb. 20, 2013