Tuesday, October 30, 2007

Article/Newsbit of the Week: $915 Billion in credit card debt

So I checked out this article on CNNMoney.com:

The $915B bomb in consumers' wallets

It talks about one of my favorite subjects - hated credit card debt. Credit card companies are starting to get nervous as people in the US are beginning to pay their bills later and later.

Here's an interesting excerpt:

"But credit card debt is different from subprime debt in another way: Unlike mortgages, credit card debt is unsecured, so a default means a total loss. And while missed payments are at a historical low, they show signs of an uptick: The quarterly delinquency rate for Capital One, Washington Mutual, Citigroup, J.P. Morgan Chase, and Bank of America rose an average of 13% in the third quarter, compared with a 2% drop in the previous quarter.

What's more, consumers and the people who market financial services to them may not have learned their lesson. Klaus-Peter Müller, CEO of Germany's Commerzbank, told Fortune he was stunned on a recent trip to the U.S. to see TV ads still aggressively touting no-questions-asked credit. In Germany he's calling for tighter standards."

It's very interesting to me how seemingly wiser heads - German bank CEO's in this instance - have a better idea of what can possibly happen, better than say some of the greedy, American CEO's who are blind when it comes to the long-term implications...more Americans in debt and no quick and easy way to get out.

'Sign up for another high-interest credit card to 'consolidate your' debt!'

And eventually, watch as America as a whole pics up the tab...


zackattack said...

Well, as I state in today's post on my blog, some people either just can't pay their bills or don't want to. We live in a generation where everybody hides behind their credit card. Plus, third-party companies love to buy debt off the financially "un"-astute.

It's good that blogs like yours and mine (when I actually update it. LOL!) are trying to inform people that money is no joke.

Stay up!

Reggie said...

It is true a lot of people do hide behind there credit card debt. Some, a little too much. The curtains are about to be pulled aside though. Hopefully, I'll have nothing to hide by then.

Thanks for the comment.