It’s already looking like an iffy New Year for many credit-card holders: the number of Americans falling behind on their payments spiked sharply this year and analysts don’t expect 2008 to be much brighter. The value of credit card accounts at least 30 days late surged 26% in October to $17.3 million, the AP found. Defaults—when lenders give up and write off the debt—jumped 18% to almost $961million.
Default rates had been nearing record lows, but the subprime mortgage mess and a sagging job market took their toll. "Debt eventually leaks into other areas, whether it starts with the mortgage and goes to the credit card or vice versa," said one expert on credit risk. And insiders expect it’ll continue next year: “It’s like a game of dominoes,” said one.