Posted on 04/26/2023 12:18:36 PM PDT by RomanSoldier19
"...While the banks might be fine, some cash-strapped and credit-abusing consumers clearly are not. The idea that JPM is building reserves to cushion themselves against bad loans amid rapidly increasing charge-offs tells you all you need to know.
Similar story at Bank of America (BAC), who also increased reserves.
Across the nation’s four biggest banks, consumer loan charge-offs increased 73% in Q1, as they wrote off $3.4 billion in bad debt during the first three months of the year. "
(Excerpt) Read more at msn.com ...
I guess they are just following the example being set by their government.
They will increase the interest rates on people with high credit ratings and charge an extra fee for the people who carry no balance. This is to subsidize people who make poor choices in life.
Just like Mortgages.
You know, like charging higher rates for those with excellent credit and lower rates for those with bad credit. It's already happening.
A lot banks are not fine. Credit card debt is only one problem. Auto loans are another problem and repos are through the roof. Yet another problem is commercial real estate mortgages. People are still working from home.
FedGuv needs to issue currency printers free of charge to all American households asap. If any of our overlords balk at this, just tell them....(fill in the blank).
Notorious comedian and troll Sam Hyde has been telling people to just go ahead and run up the credit card debt and buy anything you want. Basically, he says the only thing that happens is you won’t be able to buy a home, but since most millennials and Gen Z can’t hope to buy a home anyway, what is the difference?
Now, he is a troll, so his advice is probably being given at least half sarcastically, but I think a lot of people might hear him and say “makes sense to me”.
Makes sense to me.
🚨Yuan overtakes dollar to become most-used currency in China's cross-border transactions https://t.co/sBOXjrMvx5— Benny Johnson (@bennyjohnson) April 26, 2023
My wife works in an industry that benefits from distressed debt. I see $$$$ in the future.
“They will increase the interest rates on people with high credit ratings and charge an extra fee for the people who carry no balance. This is to subsidize people who make poor choices in life.
Just like Mortgages.”
Exactly right and your response needs repeating.
I respectfully disagree. What they will do and probably have done is increase rates and fees for people with lower credit scores and poor paying habits. I have >800 credit scores and get solicitations for 0% credit cards, sometimes with no balance transfer fees.
Credit card debt and auto loans are cyclical and have good and then bad periods as the economy does well and then craters when morons like Biden are in charge.
But commercial real estate is another issue. WFH has changed that forever and the country just does not need as much office space as before, along with the change in spending patterns in the big cities as far fewer workers are coming in 5 days a week to support restaurants etc. Similar to as when light industry and manufacturing moved out of the cities it will take decades for other things to replace those spaces and for some cities they may never be replaced.
A few years ago I was looking at spending a few thousand dollars on new kitchen appliances and wondered if I should borrow rather than pay cash. Went to my Credit Union and found out my name and that of my wife are not on any of the three credit reporting companies. We literally do not exist in the credit system. The Loan Officer was amazed and my wife looked at me and said, "Let's pay cash." We walked over to the teller counter and had a cashier's check cut then went across the street and bought our appliances.
I have no empathy for the credit card companies. This is a problem of their own making. Covid helped cause the Credit Card Debt Bubble, without Covid the potato doesn’t become POTUS. They’ve owned Biden for decades and they own this crisis too.
You are right about cities and manufacturing. Until cities are safe and offer basic services that are expected by taxpayers (clean streets, good infrastructure, sewer, water, etc.) businesses will not open in cities. As for credit card debt and auto loan defaults, they are not a result of a cycle in this instance. It’s not a business cycle roblem. The massive deficit spending that continues today and the Fed’s quantitative easing have caused inflation. Wages have not kept pace with inflation. It’s going to get much worse as unemployment goes thru the roof this year.
All those pickup trucks with $1k+ monthly payments will do that!
The interest rates on credit cards are outrageous.
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