More Credit Failures, Is The Recession Winning?
Another sign that the recession isn’t ready to give up yet. Credit card delinquencies are on the rise. A credit card account is considered to be delinquent if it has not been paid for at least 3 months.
Since credit cards are one of the major profit centers for banks, an increase in delinquent accounts cannot be good for them. The scary part of this whole fiasco is that most of the companies seeing an increase in failure to pay are also the companies that the US government have stated are financially sound.
I have a hard time believing that an increase of 9.1% in a quarter could be considered financially sound. With 1.32% of credit card holders in default right now I can imagine that we are going to see even more financial issues coming up. The new credit card rules aren’t making it any easier for banks to balance their income and expenses either.
To top everything else off the US government is now allowing 10 major banks to repay the TARP funds granted. Since each of these banks are also major credit card issuers I am skeptical how sucking out every penny of these banks operating capital to pay off the government bail out funds will ensure a successful banking system.
Is the economy getting worse or is the news finally catching up to us? Its hard to be sure, what I can be certain of is that things aren’t quite as rosy as the banking industry wants us to believe. Hang onto your hats and expect a bumpy ride ahead.
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Lol, are you really burning that note?
No, I get others to take my pictures for me.
Simple,but great.
This economy sure is crazy for everyone. Layoffs are on the rise and the banks are dropping like flies. The entire credit system needs to be refurbished in my opinion. Millions of people now have bad credit due to the economy and that doesn’t help people when they need to make purchases and help out small businesses. I think the three major reporting agencies need to lower standards on credit scores and bite the bullet so that more people can get credit when it’s needed the most..right now
Credit reporting agencies just collect facts, they don’t actually create the credit score numbers that you see bandied about. I think over the next while we will see a temporary override of the typical credit score calculation to try to skip the recent credit problems and give a more accurate view of a persons ability to handle credit. If that happens it should help to push some credit out there right now.
Moving forward I hope to see a real refresh and reboot of the foolish investment decisions that created this mess. I am less certain that the financial world will actually change though. They have too much pull on the government to be easily forced into changing.