Posted on 08/23/2007 1:39:01 PM PDT by Hydroshock
NEW YORK (CNNMoney.com) -- Fallout from the mortgage mess and lower home prices may have started to creep into the credit card arena, judging from July payments and some initial moves by issuers to tighten the screws on cardholders.
After falling for three consecutive months, delinquent payments on credit cards -- defined as more than 30 days late - increased slightly in July, to 4.64 percent from 4.62 percent in June, according to CardWeb.com. A year ago, the delinquency rate was 4.18 percent.
The amount of credit card debt consumers are paying off, meanwhile, has fallen. The portion of outstanding balances paid in July slipped to 18.3 percent from 18.4 percent a month earlier.
The repayment rate hit its peak (21 percent) in October 2006 after credit card companies began complying with regulators' mandate to boost minimum payments to cover interest, fees and some principal. For years, the default minimum was just 2 percent of your outstanding balance.
CardWeb.com CEO Robert McKinley suspects delinquencies may increase in the fourth quarter because of the credit crunch. Mortgages and home equity loans are harder to come by, home prices have fallen and more than 2 million subprime adjustable rate mortgages (ARMs) are beginning to reset to much higher rates
(Excerpt) Read more at money.cnn.com ...
Look for the banks to exercise universal default and "we can raise your interest rates due to market conditions" clauses more frequently.
It's a great time to switch to your local credit union.
Credit card company interest rates need to be controlled. Hell....everything else is.
“May be....
May have...
increased slightly in July, to 4.64 percent from 4.62 percent in June
The portion of outstanding balances paid in July slipped to 18.3 percent from 18.4 percent a month earlier.”
Was this the last one on the bottom of the barrel for the day?
Pure BS
BigMack
IF YOU PAY YOUR FULL BALANCE EVERY MONTH, YOU DON'T HAVE TO WORRY ABOUT THE RATES...............(sorry 'bout the caps, needed for work)......
You must have the cash to pay them in full.
You know what though, life happens. Not everyone uses their cc’s for material goods— some use them for medical bills, growing a business etc...
Besides, 32% interest (the “maximum allowable by law”) is usury.
Amen. Thanks Mack. Stories like this are what is fueling all hysteria.
A 0.02% increase?
BFD.
Credit unions are quasi-socialist organizations that are exempt from Federal income taxes. They used to justify that exemption based on limiting customer base. Membership is wide open now and there is no justification for the exemption other than the politics of the labor movement. If they are going to be free to conduct full blown banking business, they should not be subsidized by the tax exemption because it gives them a competitive advantage over other financial institutions.
Does this flow through to mean reduced fees / rates for customers? If so, then this conservative is all for it.
Come to think of it, maybe eliminating corporate taxes really might benefit the customers, eh?
This has happened to me with my Capital One card!! I got a letter last week telling me my card that had a %9.9 was now going to be a %15. I called to ask why and they said they were raising all of the %9.9’s to %15 because of the market.
When is the government going to learn to live within it’s means? And when are the American people going to learn to save their money for what they want to buy instead of using expensive plastic? It is way past time to shrink government at every level and reduce it’s unconstitutional intrusiveness, and it is also high time for the American people to begin to use their brains in handling their finances.
One man running for president agrees with me. He wants to cancel redundant and obsolete government departments, and relegate control of the public schools back to the local level. He also stands firmly for vouchers.
He knows what government is supposed to do - protect the country from the enemy, foreign and domestic. He wants to bring back well paying jobs to our shores to ensure a healthy middle class. He wants peace through strength, and has been working to attain that for 26 years now.
This man does not belong to any special interest group. He does not belong to the Establishment. This man will be president of ALL the people, for he serves not his party, but serves his country.
Yes, if we elect presidential Rep. Duncan Hunter as our Republican nominee in the primaries, he will, with our help, and with a cleaning of the House of Representatives, put America back on the RIGHT track.
No other candidate can win without the support of the party’s conservative base. And Duncan Hunter is the only proven conservative on the scene, or behind it, who has vision and the credentials to stand at the helm.
There is still time for you to come to the aid of your country. Vote for Duncan Hunter in the primaries for America’s sake!
Yes it does translate to lower rates and fees. There used to be a legitimate reason to exempt taxes on credit unions, but now they are commercial banks for all practical purposes. The competitive advantage is one thing that is hurting the ability of banks to attract deposits and it is raising borrowing costs across the board and making bank funding strategies more risky.
I agree in principal on eliminating corporate income taxes. C corporations do not pay taxes. The taxes are passed along to their customers. Politicians love to hide taxes so that the public will not know they are paying them (e.g. - corporate taxes, gas taxes, etc)
Whereas, of course, 28.8% is not, proving that we have the best legislators money can buy.
Drew Garrett
Imagine that. No surprise there ... Credit card companies have been extending credit to risky customers for quite a while now.
Don’t have any credit cards. If I don’t have the cash, I don’t buy it.
Bought a car two years ago and paid it off in nine months.
Uh, why not let the “market” control them?
Kind of like mutual savings banks, I guess. there are no stockholders. The members get the votes at annual meetings. That has proven over and over again to be a flawed company structure that is easily manipulated for officer/ insider abuse. “Non-profit” is a misnomer that is more appropriately termed “not-for-profit” . . . to the shareholders, that is, since there are none. They still have to make a profit to fund growth and protect against risk and losses.
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