Are credit cards the next to collaspe?

[SoloGirlsContent]

http://www.mcclatchydc.com/homepage/story/54880.html



First came trouble with mortgages, then home equity loans and commercial real estate. Now, banks are starting to worry about credit cards.

As the economy slows and unemployment rises, consumers are defaulting on credit-card payments more often. And though that trend is unlikely to create a crisis in line with the mortgage fallout, it's still a headache for banks that are already hurting.

U.S. banks charged off 5.47 percent of all credit card loans in the second quarter, according to the Federal Reserve, representing some $50 billion that they'll likely never collect. That's up from 3.85 percent the year before, and that is a movement that's on the radar of Ken Lewis, chief executive of Charlotte's Bank of America Corp.

Asked in a recent TV interview if credit-card debt would be ?the next shoe to drop? for the banking industry, Lewis replied: "It, in some ways, already is," adding that such losses have risen "pretty substantially."

[Kudles]

Mine sure feels like it

[crockett]

Well simple logic says, if someone loses their house their credit is ruined, so if they have big credit card debit (which is likely) they will walk away from that as well.

[LiveDose]

The way they have jacked up interest rates on people who would be surprised. When I hear about some of the rates people are paying the first thought that comes to mind is legal loan sharking.

Fuck we better not bail the banks out for that mess as well. Credit cards is all on them...

[Iron Fist]

Getting tired of this fearmongering.. Wall Street is cashing in MAJORLY on this fear, uncertainty and doubt. Meantime, those who can't pay the mortgage continue to be fucked over.

Besides, didn't I read somewhere, that this who crisis and mortage issue is only affecting 5% of the population? The rest of us in the meantime, are paying our bills on time like we've been doing for a long time.

[After Shock Media]

I have always felt that credit cards should only end up in the hands of the select people who have built up a very long credit history. Not those with bad credit, no credit etc. For those people they should be limited to debit and secured cards only.
So again greed by some, buying shit you more than likely do not need when you can not afford it for others, and then some just ignoring debt all together.

[Barefootsies]

Originally Posted by sharphead

Getting tired of this fearmongering.. Wall Street is cashing in MAJORLY on this fear, uncertainty and doubt. Meantime, those who can't pay the mortgage continue to be fucked over.

Besides, didn't I read somewhere, that this who crisis and mortage issue is only affecting 5% of the population? The rest of us in the meantime, are paying our bills on time like we've been doing for a long time.

[SilentKnight]

Originally Posted by After Shock Media

I have always felt that credit cards should only end up in the hands of the select people who have built up a very long credit history. Not those with bad credit, no credit etc. For those people they should be limited to debit and secured cards only.
So again greed by some, buying shit you more than likely do not need when you can not afford it for others, and then some just ignoring debt all together.

Having worked in the past for Capital One, I totally agree. We dealt with primarily American cardholders - and some days I came home from work in complete disbelief of the mentality of both cardholders and CapitalOne itself.

Often I saw people with two or three charged-off accounts STILL being handed new Capone cards (usually with a $500 limit and 28% or greater interest rate).

Unbelievable.

[GrouchyAdmin]

No. They'll just fuck anyone who uses them at 25%; Those who abuse them will kick up to 50%. God bless legal loansharking.

[d-null]

Originally Posted by SilentKnight

Having worked in the past for Capital One, I totally agree. We dealt with primarily American cardholders - and some days I came home from work in complete disbelief of the mentality of both cardholders and CapitalOne itself.

Often I saw people with two or three charged-off accounts STILL being handed new Capone cards (usually with a $500 limit and 28% or greater interest rate).

Unbelievable.

those guys are the worst

I would never get a Capital One credit card

[crockett]

Originally Posted by After Shock Media

I have always felt that credit cards should only end up in the hands of the select people who have built up a very long credit history. Not those with bad credit, no credit etc. For those people they should be limited to debit and secured cards only.
So again greed by some, buying shit you more than likely do not need when you can not afford it for others, and then some just ignoring debt all together.

The credit card companies are in biz to make money. They make more money giving high risk customers credit than they do giving cards to low risk customers. They know the high risk people will buy shit they can't afford and be late on payments, allowing them to raise the interest rates to 28% or what ever they can legally charge. Not to mention the fines they will stack on top for them not paying on time.

High risk is where they make their profits.

[After Shock Media]

Originally Posted by crockett

The credit card companies are in biz to make money. They make more money giving high risk customers credit than they do giving cards to low risk customers. They know the high risk people will buy shit they can't afford and be late on payments, allowing them to raise the interest rates to 28% or what ever they can legally charge. Not to mention the fines they will stack on top for them not paying on time.

High risk is where they make their profits.

Oh I know. It is why I said it was greed for some. (credit card companies)

I do not have kids so I do not know. Has home ec. totally vanished from school? Do they not teach how to balance a check book, how credit cards work, etc. anymore?

[mynameisjim]

Originally Posted by sharphead

Getting tired of this fearmongering.. Wall Street is cashing in MAJORLY on this fear, uncertainty and doubt. Meantime, those who can't pay the mortgage continue to be fucked over.

Besides, didn't I read somewhere, that this who crisis and mortage issue is only affecting 5% of the population? The rest of us in the meantime, are paying our bills on time like we've been doing for a long time.

Well said. I feel these days with blogs, youtube, headlines on your cell phone and everything else, things are made to be very bad.

Yes the economy is in rough shape, but all these articles about America starting a new currency or riots in the streets and bread lines is crazy. Remember just a month or two ago when all the big analysts were predicting $200 a barrel oil? What happened? It's $63 a barrel right now and those same analysts are predicting it will go down to $40.

[Varius]

You might see banks (if they haven't already) start lowering limits, cancelling cards, increasing rates and potentially screening customers harder (since right now they send card approvals to deceased people, children and people's pets from time to time LOL).

I'd expect porn sites who don't have alternative billing or mostly rely on credit card sales to see hits from this the most. People who lose their cards or have their limit lowered down will be unable to purchase porn with it even when they might still want to

[Varius]

I actually haven't owned a creditcard in about 7 years now, and I only got them back then because they looked cool (had a Harley Davidson one and a Anaheim Mighty Ducks NHL one). Sometimes its a pain in the ass like when places only take creditcards or for reservations, etc... but it's great to have no debts ever

[Slick]

I think that every 18 year old male American should be given a credit card, so they can purchase online porn ;)

[After Shock Media]

Originally Posted by Slick

I think that every 18 year old male American should be given a credit card, so they can purchase online porn ;)

They already had been. Ever seen a college campus when school starts?
If they can pay for it great, if it requires ball outs or use of tax money then fuck that. More short term thinking. Especially if it just comes around and bites your ass latter with an economic meltdown.

Besides they can use their fucking debit card.

[robfantasy]

most ppl try to maintain a good credit rating so they can buy a house...

however since it will now be harder to get a house w/out at least %20 down, people may walk away from their past debt because it takes the same time to write off bad debt as it is for most people to save enuff for a down payment