Credit Card Account Forbearance: Not Forgiveness and Not Forever

Payment holidays helped consumers get through unexpected credit risk during the pandemic, but before long it will be time to pay the piper. Suppressed delinquency volume makes risk appear under control, but the day of reckoning will soon be at hand.

COVID’s sudden grip on cardholders disrupted household budgets worldwide. Countermeasures supported by consumer protection agencies allowed for payment holidays, but sooner or later the industry will need to contend with a disrupted credit cycle. Issuers must be prepared for the upcoming storm.