Free Republic
Browse · Search
General/Chat
Topics · Post Article

Skip to comments.

Credit card defaults keep rising, report says
http://money.cnn.com/2007/08/28/pf/cards_defaults/index.htm?postversion=2007082807 ^ | 8-28-07

Posted on 08/28/2007 6:58:28 AM PDT by Hydroshock

Edited on 08/28/2007 7:18:41 AM PDT by Admin Moderator. [history]

NEW YORK (CNNMoney.com) -- American consumers are defaulting on their credit cards at a sharply higher rate compared to last year, in what could be another consequence of the recent subprime mortgage market crisis, according to a report published Tuesday.

In addition, late payments are also up, cardholders are showing signs they are less willing to pay and credit card companies have written off 30 percent more payments during the first half of this year versus a year ago, the Financial Times reported.

The credit rating agency Moody's told the paper the problem could be due to the property market slowdown and fewer homeowners opting not to refinance their residences.

"The combination of higher interest rates and a softer real estate market diminished the attractiveness of mortgage refinancings in which many borrowers reduced their more expensive credit card debt by drawing on the equity in their home," Moody's told the paper.


TOPICS:
KEYWORDS: allislost; applesonly5cents; beatingadeadhorse; beggars; breadlines; chickenlittle; cropfailures; crywolf; depression; despair; despondent; dustbowls; fallingapart; gloomy; glum; grapesofwrath; hellinahandbasket; helpme; highdivefromawindow; hoovervilles; hopeless; lovebadnews; nogoodnewsisgoodnews; nohope; nojobs; pottersville; sameoldsonganddance; skyisfalling; soupkitchens; tomjoad; vulturegram; willpostjunkforfood; woeisme

1 posted on 08/28/2007 6:58:31 AM PDT by Hydroshock
[ Post Reply | Private Reply | View Replies]

To: Hydroshock

I’m paying mine off with as big a payment each month that I can afford. Unexpected bills made me take the card back out of the safe, but it’s been returned, and now I’m clearing the red ink.


2 posted on 08/28/2007 7:00:36 AM PDT by theDentist (Qwerty ergo typo : I type, therefore I misspelll.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Hydroshock

Credit card defaults are up because credit card issuing banks are giving them out like candy canes at Christmas, to people who have no financial substance. My mailbox is full to overflowing with CC offers from banks in places I’ve never been, like South Dakota and Michigan..........


3 posted on 08/28/2007 7:02:41 AM PDT by Red Badger (ALL that CARBON in ALL that oil & coal was once in the atmospere. We're just putting it back!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Hydroshock

The credit card industry has allowed for major losses in the fees/interest they charge. Their entire marketing campaign has been to THROW credit at anyone and hope that a percentage would pay back. They target college campuses and young people they know do not have the sense to not play with something they cannot afford to pay off....it is all about playing the odds. After all, where else can any organization, bank or otherwise, make 20% per year on their money reliably??? The risk is worth it.


4 posted on 08/28/2007 7:03:15 AM PDT by EagleUSA
[ Post Reply | Private Reply | To 1 | View Replies]

To: Hydroshock

Ripple effects.....


5 posted on 08/28/2007 7:05:18 AM PDT by Uncle Ike (We has met the enemy, and he is us........)
[ Post Reply | Private Reply | To 1 | View Replies]

To: EagleUSA
The credit card industry has allowed for major losses in the fees/interest they charge. Their entire marketing campaign has been to THROW credit at anyone and hope that a percentage would pay back. ...

I suspect this is also true about the subprime mortgage market. I have not seen any discussion of how the fee structure for such mortgages was set up or what default rate the lenders originally expected.

6 posted on 08/28/2007 7:05:44 AM PDT by Brujo (Quod volunt, credunt.)
[ Post Reply | Private Reply | To 4 | View Replies]

To: Hydroshock
...credit card companies have written off 30 percent more payments...

Just means that the rest of the credit card suckers will have to pay more to bail out the companies.

7 posted on 08/28/2007 7:08:40 AM PDT by FreePaul
[ Post Reply | Private Reply | To 1 | View Replies]

To: Red Badger
"My mailbox is full to overflowing with CC offers from banks in places I’ve never been, like South Dakota and Michigan.........."

Same here. They go into the garbage, after a short detour through the shredder.

And I'm proud to say that I have neither credit cards nor credit card debt. 'Twas not always thus, but thus it shall remain.
8 posted on 08/28/2007 7:12:23 AM PDT by LIConFem (Thompson 2008. Lifetime ACU Rating: 86 -- Hunter 2008 (VP) Lifetime ACU Rating: 92)
[ Post Reply | Private Reply | To 3 | View Replies]

To: Hydroshock

Oh, too bad. Take the losses and learn something.


9 posted on 08/28/2007 7:18:20 AM PDT by Tax-chick (Gravity! It's not just a good idea, it's the law!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Hydroshock
"In Debt We Trust" . . . 'Nuff said.
10 posted on 08/28/2007 7:26:56 AM PDT by ex-Texan (Matthew 7: 1 - 6)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Red Badger

Banks locate to states where they can charge higher interest rates.


11 posted on 08/28/2007 7:27:45 AM PDT by PeteB570 (Guns, what real men want for Christmas)
[ Post Reply | Private Reply | To 3 | View Replies]

To: LIConFem

We pay our CC in full every month and only use one. We live within our means and don’t go overboard at Christmas and other holidays. It’s not difficult to do. We don’t play “Keep up with the Joneses” and do whatever we can to keep our cost of living down. My 20 year old daughter, on the other hand, is well on her way to bankruptcy..............


12 posted on 08/28/2007 7:33:16 AM PDT by Red Badger (ALL that CARBON in ALL that oil & coal was once in the atmospere. We're just putting it back!)
[ Post Reply | Private Reply | To 8 | View Replies]

To: Red Badger
"My 20 year old daughter, on the other hand, is well on her way to bankruptcy.............."

Very nearly went that route myself, in my late 30's. Took a few years (3 or 4) to pay everything off, and I haven't borrowed a single cent since.
13 posted on 08/28/2007 7:41:51 AM PDT by LIConFem (Thompson 2008. Lifetime ACU Rating: 86 -- Hunter 2008 (VP) Lifetime ACU Rating: 92)
[ Post Reply | Private Reply | To 12 | View Replies]

To: Red Badger
My mailbox is full to overflowing with CC offers from banks in places I’ve never been, like South Dakota and Michigan..........

Go to junkbusters.com and check out the resources there. They provide you with printable form letters you can send to the credit bureaus, to tell them not to release your credit information "for promotional purposes", i.e., these solicitation letters that are just trolling for suckers. They can still answer legitimate inquiries about you, but at least the junk mail will settle down.

14 posted on 08/28/2007 7:46:41 AM PDT by thulldud ("Para inglÚs, oprima el dos.")
[ Post Reply | Private Reply | To 3 | View Replies]

To: FreePaul

NOt if you pay off your bill every month like my wife and I. Besides I like getting free airline tickets.


15 posted on 08/28/2007 10:59:59 AM PDT by Hydroshock ("The Constitution should be taken like mountain whiskey -- undiluted and untaxed." - Sam Ervin)
[ Post Reply | Private Reply | To 7 | View Replies]

To: Hydroshock; Red Badger

In a thread on credit cards a while back I mentioned not buying anything you couldn’t afford. I thought I had started a riot. Several people took violent exception to that. Apparently there are some things you are supposed to buy by credit card even if you can’t pay for them. I guess I just don’t understand. I’ll bet the credit card companies do though.


16 posted on 08/28/2007 2:11:52 PM PDT by FreePaul
[ Post Reply | Private Reply | To 15 | View Replies]

To: Red Badger

Daughters! lol


17 posted on 08/28/2007 2:23:34 PM PDT by Continental Soldier
[ Post Reply | Private Reply | To 12 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
General/Chat
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson