Stimulus Cash Minimized Impression Retail Closures Had on Retailer Credit score Playing cards

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Despite limited access to physical stores at the start of the pandemic, retail credit card-backed securities have not and have not been affected by store closures lead to increased failures, according to data from Fitch Ratings.

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After three rounds of stimulus, more Americans were able to put cash into savings or on outstanding debt. A study by Northwestern Mutual found that personal debt has fallen by more than 20% since 2019.

“The fact that people are making significant strides in deleveraging is encouraging to see, especially at a time when many are still recovering from the financial impact and uncertainty caused by the COVID-19 pandemic,” Christian said Mitchell, Executive Vice President & Chief Customer Officer at Northwestern Mutual.

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The performance of the retail credit card trust is largely influenced by consumer strength. While fees slowed at the beginning of the pandemic, they have since increased to higher levels than they were before the pandemic. Fitch Ratings cites consumer willingness to use federal unemployment benefits and individual stimulus checks to help settle credit card debt.

According to Fitch’s retail credit card index, the 12-month average of late payments of 60 days or more fell from 2.78% in March last year to 1.77% in August. Withdrawal rates are still low with a 12-month average of 4.92% (as of August 2021 from 7% in March 2020) The increase in credit card balances continues to show an upward trend.

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Fitch Ratings also noted that as the delta variant spreads, it is too early to say if the balance continues to rise and Consumer confidence is falling. Retail cards also have a lower consumer payment priority.

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Last updated: September 23, 2021

This article originally appeared on GOBankingRates.com: Stimulus Money minimized the impact of retail closures on store credit cards