by taking drastic steps, even if they hurt good customers in the process.
Randall Pinkston reports - CBS News.
CBS, October 30, 2008,
To reduce their risk, credit card companies are taking drastic steps to protect themselves from a rising wave of defaults, even if they hurt good customers, reports CBS News correspondent Randall Pinkston.
"Credit card companies are facing about $40 billion in credit card losses this year and that number may double next year," said Bernard Baumohl, chief economist for the Economic Outlook Group.
That's because more consumers are falling deeper in debt. The average American has nine credit cards and owes more than $16,000, not including mortgages.
"People have been spending far more than the growth in their wages and salaries," said Baumohl.
This decade, real wages went up 4 percent while credit card debt jumped more than 75 percent.
"So what they're doing in order to balance what is happening on the negative end is to apply some pressure to their consumers," said Emily Peters of Credit.com.
The credit card companies are:
- Raising interest rates
- Not taking new customers
- Reducing credit limits
- Closing dormant accounts
Related Posts :
- Credit Do's and Don'ts
- The Next Meltdown: $950 bn Worth of Outstanding Credit-Card Debt—Much of it toxic
- CBS Evening News: Credit Crunch Takes New Face, October 30, 2008
This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer on the bottom for more information.
You are welcome to republish this article, or any portion thereof.
Please, cite the actual/original source. I would be grateful if you could link back.
No comments:
Post a Comment