Credit Crunch Takes New Face

(CBS)  Dianna Kincade of Maple Grove, Minn., pays her bills on time -- but that didn't stop Sears MasterCard from cutting her credit limit in half.

"They reviewed my account and since I did not use my credit limit, they were going to decrease it," she said.

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

"Is it really fair for those who maintained really good credit all our lives?" asked Kincade, who actually convinced Sears MasterCard to restore her credit limit.

"Should we have to, I guess, pay for what's going on right now in the economy?"

Fair or not, it's a bill millions of Americans have to pay.

[tincup356]

can you spell conspiracy? that is what all of this mess is going to reveal.wake up people , the government of our country is in a conspiracy with wall st and the banks, and corporate America to rob the people blind and leave us in a position that will cause the middle and lower classes to be shove to the economy basement and we will never be able to rise out of.Please think twice before you use your vote,a vote for any of the conspirators in Congress that voted for the SELLOUT, is another nail in the middle classes coffin.Mark my word they are not even close to being through selling us out,they are waiting for the election because after that they know they are in the clear to do whatever they wish.If those incumbents are re-elected the only recourse the American people will have is a revolution, when will you become hungry and homeless enough to stand up for the rights as Americans we are losing fast?Time to take the shovel and clean the barn.Then time to bring to justice all the criminals who have been in on this vast conspiracy.

[gramto8]

Credit card companies aren''t the only ones that need to be corrected. Mortgage SERVICING companies such as OCWEN need to be changed as well. I got behind on house payments several years ago shortly after my husband died. Instead of them allowing me to put the two payments to the end of my mortgage, they arranged it so that I had late charges accruing every month until THEY decided I could come off the program that was helping me not go into foreclosure. I really had no choice but to either go with their way or lose my home. I would up at the end of the program with an additional $4000 added to my mortgage and never a chance for the interest rate to be lowered below its current 13.25%.

[txgrouch2007]

to inject this much liquidity into the system will create tremendous downward pressure on the dollar. If the dollar falls apart, the United States will no longer have the ability to fix its problems with the printing press.....
Posted by Hacker11001 at 08:33 AM : Oct 31, 2008

It will also DESTROY our ability to continue our ruinous trade deficit. We will no longer be able to buy foreign goods.

That will eliminate the incentive for foreign powers to continue buying up our debt, so the Treasury will not be able to sell bonds to support our budget deficit.

In other words, we will be FORCED TO BALANCE THE BUDGET, and INDUSTRY WILL HAVE TO MOVE BACK HERE and give jobs back to American workers when foreigners become uncompetitive due to the devaluation of the US dollar.

And that would be BAD because ... ummm .... ummm ...

This could be JUST THE MEDICINE WE NEED.

[txgrouch2007]

*** WARNING *** WARNING *** WARNING ***

Yesterday the government announced that it will use the $700 billion bailout TO BUY STOCK IN BANKS instead of buying up high-risk loans at a discount as originally planned.

IT SHOULD BE OBVIOUS WHAT AN ***INCREDIBLE*** CONFLICT OF INTEREST THIS IS, when the government owns stock in a business that IT REGULATES!!!!!

ISN''T THAT OBVIOUS??????????????????

The government will be MUCH MORE INCLINED to make regulations that are favorable to the businesses, instead of making regulations to protect the public AS THEY ARE SUPPOSED TO DO.

Our federal government has ABANDONED its purpose and become an accomplice to the WEALTHY BUSINESS OWNERS who now control our Congress and the White House.

OUR FEDERAL GOVERNMENT IS BOUGHT AND PAID FOR. They will start robbing and pillaging as soon as Election Day is over.

VOTE THEM OUT!

VOTE THEM *ALL* OUT!!

VOTE WHILE YOU STILL HAVE THE CHANCE!!!

[gop_will_win]

Here is what I suggest. Put a interest cap on credit cards. If a credit card company ecceeds the interest, fine the hell out of them.


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Posted by HK4U
=================
Here is what I suggest, pay your bill off every month. Then you never have to pay any interest.

[gop_will_win]

I am so glad that our bailout money is going to bonuses for executives of the banks and for dividends for the shareholders.

[rcgreene1]

I can''t muster any sympathy for either the credit card companies or for Miss Kincade. CC companies raised credit limits as a marketing tool and an encouragement to spend beyond need. Accounting techniques allowed this to become "assets" for the CC companies when convenient, and as "losses" when convenient. Perhaps we should simply jail all marketing executives (as well as all CC company execs).

But the folks who spend simply because they have a higher limit are at fault as well.

I DO have sympathy for those who lose their jobs and use credit cards to make ends meet. But using up credit hoping you will get a job down the line is too dangerous. The whole economic system is at fault here: no one who could make a difference cared to make a difference, except for themselves.

As for those who never spend to their limit, why get cranky over losing something you don''t need?

[u-r-right]

My wife received a Washington Mutual credit card offer almost two weeks AFTER they shut their doors! That tells me these credit card lenders have no checks and balances to really know what is going on within their own company.

[slim1h2o]

"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 not even half of what these turds have taken in, thru sky high interest rates, and their ridiculous fees.

Remember credit card companies, what goes around, comes around.....

[tannerbird]

forty5ford thanks for the info.