2012 is likely to be a year of credit recovery thanks to the legislation of 2011 as well as the evolution of consumer outlook on their financial needs versus wants list. It of course can’t be set into stone that 2012 will bring about an even better economic and credit climate than last year, but there are six factors which forecasters consider positive indications.
Higher Credit Scores – Overall economic stability likely means higher credit scores across the board. National unemployment dropped from 2010 to 2011 and has indications of further dropping in 2012. How does this mean higher credit scores? Typically consistent income and jobs is a direct indicator that consumers will be able to pay their bills on time and therefore be able to maintain a healthy credit score.
What Frank-Dodd did Part 1 - The Frank-Dodd act of 2010 put into effect as of October 1st, 2011 a multitude of financial policies to benefit and protect consumers. One of the many changes under this law changed transaction fees banks are allowed to charge on debit card transactions. Since October we’ve seen a bit of flip-flopping of banks attempting to enact a monthly debit card fee. It’s hard to say where this will land but its more than likely that we will see less debit card use and a rise in pre-paid “debit” cards as well as rewards credit cards. An increase in credit card use should help boost the credit economy.