Posted on 10/16/2008 10:15:31 AM PDT by BGHater
Consumers are increasingly unable to pay off their credit cards, forcing banks to hoard cash to protect against future losses and lend to fewer people, according to reports yesterday from several of the nation's largest banks.
These financial disclosures showed a spike in credit card loans going bad, putting further pressure on already-stressed balance sheets. J.P. Morgan Chase said the number of credit card loans in default rose 45 percent in the third quarter from the comparable period a year ago and predicted that default rates would sharply accelerate through 2009, with 7 percent of credit card loans going bad.
"We have to be prepared that it gets a lot worse," J.P. Morgan chief executive Jamie Dimon said about the overall economic outlook.
Capital One, a credit card lender and bank based in McLean, announced rising default rates and delinquencies in its portfolio of credit cards and auto finance loans yesterday. The company said 6.34 percent of credit card loans went into default last month, up from 5.96 percent of loans in August. The company has said it expects default rates to rise to 7 percent next year.
The deterioration in consumer credit, the latest downturn to whack Americans after the housing slump and mortgage meltdown, threatens one of the linchpins of the U.S. economy. Over the past 10 years, credit card debt has gone up 75 percent as Americans' real wages and savings rate have stayed flat. That means Americans have been spending beyond their means -- and fueling economic growth with borrowed money.
(Excerpt) Read more at washingtonpost.com ...
absolutely right.
It’s best to not have the darn things around.
Yes. Their statistics probably show that most people just revert back to old habits.
Yours is just a random computer model; they don't know that you're one of the ones working hard to get your balance to zero for the longer term future. Because of your past history you're worth the .39 cents to send an offer to.
bank of america (which I cut up a a couple of yrs ago) sent me an email saying they are rescinding my card because I don’t use it.
Good! I don’t care
RE: “These media stories are suspect. I know people who just got credit lines increased without even asking, and people who continue to get blank checks in the mail, inviting them to borrow thousands of dollars. Doesn’t jibe with the media noise”
***********
Agree — I get these come-ons all the time but have never taken advantage of any. Note: Be sure to shred the applications and blank checks as they are frequent causes of fraud.
Generally, if you can’t afford to pay cash for a depreciating asset, then you shouldn’t buy it.
Live with less, you know?
lol!
Quick! Charge it up!
In the last month, i’ve looked into getting car loans, a new $20,000 limit credit card, and a mortgage. I was accepted on all counts. I see no personal evidence of any credit crunch.
“A testament to W’s economic policies. “
I hardly think the President is soooo powerful as to change the face of our economy. If that is the case, then I expect your suport that should Obama win the Presidency and the economy continues to tank you will repeat those comments about Obama.
“Westerners need to learn to LIVE WITH LESS.”
As opposed to “Easterners” doing the same thing? Other countries buy as much junk as we do. Why did you single out “westerners”?
Just burn your 1040. That will hurt even worse.
I was one of them,but of course we got the “they shouldn’t borrow if they can’t pay”, back then too.Problem was,the rules were changed in the middle of the game.
Well, folks like me and you who know that you can’t spend more than you earn, will end up bailing out all of these folks driving around in $40,000 cars and $1million homes.
They are completely tapped out and have more going out than coming in each month. The are unwilling or mentally incapable of living within their means.
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