Credit ratings matter a lot to people, but only if they’re good. As we continue to shed jobs at a rate of half a million a month, and those with previously decent credit no longer have an income, people will simply stop paying their non-essential bills.
They’ll hold on for a month or three, but after they feel enough damage has been done to their credit rating that it no longer matters, they’ll stop paying all their credit card bills and focus any funds they have to the essentials–rent, food, gas.
However bad it is for banks right now, it’s going to get a lot worse. I imagine it’ll be in full force by around June. ::