5 ways coronavirus clobbered access to credit
Unlike past economic recessions where businesses and consumers have had to adjust their payment habits and debt levels over the course of months or quarters as the economy shrank, the coronavirus-induced economic crisis has forced many to make much more abrupt financial adjustments.
Despite the gradual return to work occurring in many states, there are over 36 million Americans who have filed for unemployment since mid-March, according to the Department of Labor. This creates a massive risk for card issuers, and a massive shift in demand for consumers seeking credit.
As the global pandemic has already infected over 1.5 million Americans according to Johns Hopkins, there is the potential that this number could quickly climb if businesses and consumers do not follow CDC safety guidelines and social distancing rules as state economies reopen. A spike in new cases could cause a boomerang effect of renewed businesses closures and higher unemployment levels that could impact the credit card market.