Generally, the credit-card industry has remained resilient during economic downturns because of pricing flexibility—basically, card issuers are able to boost earnings through late fees and higher interest rates as the economy slows and people are late on payments. However, right now, card issuers are faced with many consumers who defaulting on their credit cards—and the losses caused by those consumer defaults may surpass what credit companies were hoping balance out with extra fees and higher interest rates.
Source:
TIME magazine: With Defaults Rising, Is A Credit-Card Crisis Looming?
