Oct. 30, 2008
Credit Crunch Takes New Face
CBS Evening News: Credit Card Companies Take Drastic Steps To Reduce Risk, Even At The Expense Of Good Customers
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Play CBS Video Video The Credit Card Crunch Credit card companies are reducing the risk of defaults by taking drastic steps, even if they hurt good customers in the process. Randall Pinkston reports.
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Video Notebook: Credit Cards The number of Americans unable to make their credit card payments is rising faster than ever, according to a new report. Katie Couric comments on the crisis that may be lurking in your pocket.
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(CBS)
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Timeline Credit Crunch Feeling the squeeze? Here's a look at actions and statements from key players in Washington.
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Interactive Eye On The Economy In-depth features on U.S. markets, taxes, employment and the Federal Reserve.
"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:
"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.
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See all 28 CommentsPosted 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.
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!!!
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Posted by HK4U
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Here is what I suggest, pay your bill off every month. Then you never have to pay any interest.
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?
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.....
As well as an arm and a leg from the taxpayer.
If that includes student and auto loans, it is misleading to put it that way.
And now they want a business model where they make lots of money with zero risk. And if they screw up a government handout is always available.
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