Losses on credit cards are among the highest of all consumer loan types.

Question

Quizplus · Accepted Answer

According to data from the Federal Reserve, losses on credit cards are higher than any other consumer loan type, including mortgages, auto loans, and student loans. This is due to the fact that credit card debt is unsecured, meaning there is no collateral for the lender to seize if the borrower defaults on their payments. Additionally, credit card interest rates tend to be higher than other loan types, leading to greater potential for missed payments and defaults.

Losses on Credit Cards Are Among the Highest of All