Amount of unpaid credit card bills is rising

[varun]

Source: MSNBC

SAN FRANCISCO - Americans are falling behind on their credit card payments at an alarming rate, sending delinquencies and defaults surging by double-digit percentages in the last year and prompting warnings of worse to come.

An Associated Press analysis of financial data from the country’s largest card issuers also found that the greatest rise was among accounts more than 90 days in arrears.

Experts say these signs of the deterioration of finances of many households are partly a byproduct of the subprime mortgage crisis and could spell more trouble ahead for an already sputtering economy.

“Debt eventually leaks into other areas, whether it starts with the mortgage and goes to the credit card or vice versa,” said Cliff Tan, a visiting scholar at Stanford University and an expert on credit risk. “We’re starting to see leaks now.”




Read more: http://www.msnbc.msn.com/id/22379989/

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Bush is trying to fix one leak with chewing gum...while thousand other leaks spring...

[Alexander]

1. Good thing I stay away from credit cards.

And I advise everyone else to do the same.

[Bobbieo]

2. If I have to use a credit card, I pay it up at the end of the month - always.

I know they hate me!!! Guess I am a dead beat in their eyes!

[Alexander]

27. Some companies will charge you just for doing that.

[Yavapai]

30. Only once will they do that,

after that they will be canceled!

[Acadia Blue]

31. You are really smart to stay away from them. People should stop

feeding the pigs.

[Zorra]

3. I believe the DU cliche, "I'm shocked!" is appropriate here. n/t

[whistle]

4. Not surprised as we are already in a recession and people are

...spending for Christmas, but nobody knows what is coming next. It certainly will not be new jobs stimulation from BushCo and it will almost be surely more misery and economic hardship for most Americans. Most likely a lot of the credit card spending is on necessities like medical bills and home repairs and food

[L0oniX]

5. You can't establish a credit score without having some credit cards.

You must have a good credit score to qualify to purchase a home. You can't build up a good credit score in any other way except by using credit cards. Pay them off every month and don't rack up high charges but by all means keep a Master, Visa, Discover, an American Express card in good standing. Your credit score will affect your insurance rates and your future good job.

[MadHound]

19. Having never had a credit card, I built up my credit just fine

I have a very high credit rating, purchase two houses, and never had a credit card. All sorts of things go into your credit score, not just your credit card record. Everything from loans to bills to those book and music clubs you belong to, it all gets tossed in.

I paid my bills and debts on time, and when I finally got enough money for a decent downpayment together in the early ninties, I discovered I had a decent enough credit score to get my first mortgage. Since then, my credit rating has gone up, and I got a mortgage on my second house very easily.

You do not need a credit card to establish your credit rating, just a few years of being on time with the rent and bills will do the trick.

[Alexander]

28. Pay rent on time at an apartment - no credit card needed.

You're wrong. I am living proof.

[humbled_opinion]

6. Sure lets get a tax break for the card companies thats on the Pubbie agenda

I'm Sure... :puke:

[FlyingSquirrel]

7. Ya.. sucks that I donated to Kucinich & Edwards & Second Harvest

Just delaying my paying off credit cards that much longer.

:smoke:

[madrchsod]

8. can`t get one ! no job and crap credit

kind`a sucks sometimes but the only thing i really owe is 400 a month in a house payment. good thing my wife makes enough to pay most of the bills. where are those jobs in bush`s great economy?

[harmonicon]

10. they're in china

Move there - the fields of lead paint applying and poison-infusing are on the rise.

[LaStrega]

9. I make pretty good money, and I'm barely getting by ...

credit cards and heating bills are kicking my ass

[1monster]

11. It isn't just the subprime mortgages that are causing the credit card problems.

It is the credit card companies themselves. They charge outrageous late fees even if you are just one minute late (via Internet or phone payment) and raise the interest rate up to more than 31% at this point.

A measly $300 credit card debt can zoom up to $600 in no time at all.

If a person has a medical disaster in their family and misses a payment or is late with a payment a couple months, then he/she is screwed. The credit card companies will not forgive that missed payment and add it to the end of the loan. They will continue adding late charges until the late payment is made up.

Some people are paying five, six, or ten times the amount they originally charged to the credit card.

Credit cards were once a reasonable way to purchase necessary or luxury items. One paid an interest rate that was high, but not unreasonably so. There was usually a grace period before a late fee was added and that late fee was between five and ten dollars.

Not anymore. Late fees are $39.00. Interest rates are over 30% now and probably will go higher.

Credit card companies are no longer credit companies. They are predatory loan sharks. The policies they practice today as business as usual would have gotten them ten to twenty (in the slammer) twenty plus years ago.

But, of course, now they own the legislative, the executive, and the judicial branches of government. So what they do is legal.

[Chomskyite]

12. We can thank Joseph Biden for a lot of that, too . . .

. . . much as I like the guy on other votes.

I'm afraid we'll only get credit card policy reform if there's a huge crisis. And it's hard to know whether to root for the crisis or root for its postponement.

Me? I told Chase Visa they'd better cut my minimum payment. They wouldn't cut it a dime. So I told them to sic their dogs on me. I cut my land line, got a cell phone and trashed their mail. They sold the debt to a series of law firms. I'm a college teacher. Home ownership for those starting out in my profession is a thing of the past.

They didn't want the money I *could* pay them. So they got nothing. But I was prepared to bear the consequences.

We can either beat back the predatory lenders or there will be debtor's prisons. That's the next step. They can't afford to sue all of us.

[bobo4u]

14. I assume you don't teach ethics.

Who do you think gets to pick up the the tab for your refusal to pay?

Maybe you should return the items you bought with the cards.

[Yuugal]

18. I pleaded with the board to show more ethics

But it just didn't do any good: the Board of directors of the Yuugal Corporation decided in a 4-1 vote that since 2007 revenues were in fact a great deal below our previous estimates, capital expenditures on debt repayment would have to be suspended indefinitely. After the meeting, chairman Yuugal was heard to mutter, "Too bad we aren't a real corporation , that way we could have stolen some retirees pension fund while we were in bankruptcy." When asked who was to blame for this debacle, another senior board member commented that "If you give a monkey a gun and the monkey shoots someone you don't blame the monkey or the guy with the new hole in his chest."

In happier news, the board unanimously passed the "We're outta this shithole country Act of 2008", which is contingent on Hillary winning the nomination. The vote was 4-0 with the 12 yr old board member abstaining due to a sudden run to the toilet caused by her recent "run to the border". However, sounds of "Viv la France!" and "God save the Queen" were both heard emanating from the chamber adjoining the boardroom.

[Zorra]

20. *snarf* CEO's of financial institutions are getting $20 million bonuses.

So, it's certainly not them that are picking up the tab.

Screwing banks on credit card loans is not unethical - it is an act of patriotism.

Credit cards are nothing but the bait that snakes use to capture their prey.

[1monster]

25. The credit card companies reaping are double, triple, quadruple pure profits on the backs

of their credit card users.

Look at the posts below of people who have had their balances increased dramatically without ever charging another thing.

Six years ago, my husband and I had a credit score of 750. Then one of the banks, with which we had a MasterCard and a Visa, got sold or absorbed by another bank. That bank decided to switch all of the MasterCards over to Visa. If they sent an annoucement about it, I didn't see it.

So, since I could seem to find any new MasterCard statements, I continued to pay it using old MasterCard statements I had around the house or by automatic phone payment. And I paid the Visa too.

When I got a Visa notice several months after that I was three months behind in payment, I called the bank and asked what the heck was going on.

Apparently, I had been paying the same bill twice every month while not paying the other bill. They cancelled the credit card and put a real nasty on the credit report even though they created the confusion in the first place.

Then my husband needed emergency heart surgery, which caused a severe strain on our budget. There were many months when I had to alternate which bills got paid.

I finally got all the medical bills paid off in August of last year and thought I'd be able to start paying off all the other bills. (By the way, when you don't pay the medical bills, they set lawyers on to you almost immediately...)

In September (just after paying off all the previous medical bills), my husband had a heart attack.

Several bills I had paid down to less than $150. Months and many payments later, I still owe those bastards $200 plus.

Pure profit except for the few pennies it costs to add costs every month and the bulk rate postage to send it out.

Who pays for the credit card default? Most likely, the credit holder has already paid the original charge, plus a high interest rate, plus penalties, and sitll owes much more than originally charged.

The credit card companies are organized and legal racketeering.

[tblue37]

23. Yep. That's my problem with Biden as well.

He will get my support if he is the nominee, of course, but I won't support him at all in the primaries.

[sss1977]

15. yup

[tblue37]

21. 1monster said

"Some people are paying five, six, or ten times the amount they originally charged to the credit card."

That happened to me after my divorce in the 1980s. I had two kids at the time, ages 21 months and 3 1/2 years. I had charged something worth $700 on my Sears card. A temporary employment problem not long after the divorce caused a couple of late payments, and before I knew it, I owed $2200, without ever having used the card beyond that first charge! They kept piling on late charges, and on top of that my interest rate zoomed so high that my minimum payment sometimes ended up being more than I could afford. Sometimes I would think I had made the payment on time, but because of the way they credited the payments, they would count it as late, even if I had sent it in plenty of time to get there before the cutoff point--oops! more late charges and larger minimum payments.

It got to the point where even if I was making my minimum payments I was still being charged penalty fees because I was over my credit limit because of the penalties they kept adding.

As my kids grew up, I had a bunch of poorly paid jobs because they were the ones that would let me stay home with them while they were young. I ended up heavily in debt. Now that they are adults, I have spent the past 2 years paying off my debt ($11,000 at one point!). Now I owe just $790 total, and will have it paid off within the next few months. I normally don't use credit at all any more, except that I will use my Target charge card and then pay it off when the bill comes due. I do that because they have a good rewards program (a 10% off shopping day), and I like to use that 10% discount for larger items or significant shopping needs.

I am just one of many, many people who no longer use credit except in a way that lets us exploit rewards programs without paying interest or penalty fees. Since the banks that issue credit cards make money from credit card users, but have lost me as a victim altogether--and people like me--this means that they are losing money where they used to make it. I pay my bill in full each time, and I use their 10% discount. I chuckle to myself every time I send in my payment and use my discount card.

Basically, with those usurious policies they have killed the goose that laid the golden egg. Greedy pigs always do that. They never can understand the long-term consequences of their short-term greed. They also never can predict that eventually the poor and middle class will turn on them and elect an FDR because they will figure out that they are getting screwed by the oligarchs they have been propagandized into electing for so long.

[wishlist]

26. At least with Target card, you can call and pay by phone with no extra fee

One of my pet peeves about most credit cards, and reason I just have a Target card now (necessary for travel reservations etc) is that Target visa does allow you to call and make an automated payment by phone out of your checking account at no extra charge. The main benefit is not just convenience and saving the cost of postage but eliminating the risk of a payment getting delayed in the mail. I honestly believe that many other companies charge extra for phone payments because they also want to make money from late charges when payments arrive in the mail a day late. For that reason I cancelled and tore up my other cards.

Our consumer economy is only staying afloat because of borrowing, but at some point with incomes not rising as fast as inflation and overextended credit, it isn't surprising that people are falling behind.

[greyghost]

13. Car repos are going through the roof as well...

They are doing all they can to prop up our collapsing economy in the MSM until Bush leaves office. However, at this rate they thankfully won't be able to. We're looking at economic collapse, by the time this is over a recession would have looked pretty good.

Make no mistake, collapse is what is coming. I only hope that the blame is laid right on that dumb fucks doorstep.

[liberal hypnotist]

16. Look at the credit card companies for the answer.

Several years ago due to an automobile accident, I got into a lot of credit card debt. Our twelve thousand dollars worth of credit card debt was compounded to over 40,000 within 12 months. Every effort to strike a payoff deal with the credit card companies was refused. Only, American Express was helpful.

The other Credit Card Companies sold the accounts carried my balance as an overdue account and the company that bought the account increased the amount due and then sold it to another company. The final tally for a about 3200. credit card debt was nearly 10,000 on my credit report by three companies for the one debt. Each credit card company responded in a similar way.

The problem is with the legislature. Now, I keep one credit card and pay it monthly. Of course it is a long hall to bring up my credit score.

[tblue37]

22. Actually, it took me just a little over 1 1/2 years of paying my debt on time to

raise my credit score from poor to fair. I am now 10 points above the national average.

[pattmarty]

17. I believe they call these high rates "usury".

I am 61 yo and have NEVER owned a credit card. Look what deregulation has done to the banking/credit "industry". A few years ago this was illegal (look at the Mafia) and now these companies can legally charge rates well into the 30 percent area. "Merry Christmas" from the credit card industry!!!!!!!

[Lydia Leftcoast]

24. Another legacy of the Reagan administration

Interest rates rose to unprecedented heights during the early 1980s as "shock therapy" for inflation, but they never came back down, and they have remained at what used to be considered loan shark rates since then.

There was a cartoon during that era of two men sitting in a prison cell, one of them saying, "I'm in here for charging 15% interest."

[i want in]

29. I blame the new bankruptcy law for this

Not the rates and charges those are relatively the same since the 90's. But, the number of people in default. When the banks pushed though these new laws with Bush as their puppet saying " people need to be accountable for the debt and not just let off the hook " the amount of credit card offers tripled in my mailbox. Of'couse they all had nice teaser rates and hide the details in the small print. ( always read the small print )


I already had more then enough credit cards 2, so i just shred and toss.

With the exception of two test to see if the credit companies felt they too were to be accountable for the debt that they issue. You see before the new laws companies actually looked at the info you submit and checked it to verify. Well knowing that they will be able to more easily keep debtor's as salves, apparently they don't check that info anymore.

With two of the offers I put down false, ludicrously high and easy to find false, but was issued cards for 100,000.00 in credit. Now when they came I shredded and burned. Didn't activate, much to the dismay of the issuer, who called and called asking why I did not activate and use their great offer. Each offering to send new cards when informed I decided to shred the cards and not use them.

I guess since the law these credit companies no longer need to check the info as thoroughly as in the past and have more then likely risen their profits by cutting their staff. Why bother just sell the debt not collected to third party collections and write off the uncollected balance, fees and penalties.

Now if Bush, congress, the senate and banks were serious about bankruptcy laws they would have included a provision either in that law or a new tax law provision that stated in no uncertain words the following.

1. In the event of a debtor default a creditor is only allowed to sell the original debt, without penalties,interest,or membership fees attached.

2. The loss the creditor is allowed to write off is the difference between what was owed and what the account was sold for ex.)
Amount in default $500.00 dollars, minus amount account was sold for (usually pennies on the dollar, but wouldn't be if this was put in place) $33.49 rounded to the nearest dollar, would be $467.00.

3. Collection companies shall only be allowed to collect the amount of the original debt. In this case $500.00. without attaching further charges.

Now a law like this and I would never had been issued the cards I was period.

I wrote out this out in more detail and sent it to my representatives, received no response. In the fascist county we now live in a am not surprised, are you?

Keep in mind to stabilize the economy this law could still be passed, but it won't.