Credit Card Debt Grows, As Does Non-Payment

[Purveyor]

If you pay attention to advertising, you've probably heard Capital One ask, "What's in your wallet?"

The credit card company, of course, wants the answer to be: a Capital One card.

But in the months ahead, it looks like the company will be hoping for a little more in your wallet than the card. Capital One wants you to have enough money to pay your credit card bills too.

Lately, with high energy costs and the housing recession emptying wallets, the number of people falling more than 30 days behind on their credit card bills has climbed. And Capital One has given up on a rising number of uncollectible card payments. So-called charge-offs rose to 5.74 percent in December, from 5.34 percent a month earlier.

The company said Thursday that fourth-quarter profit will be 44 percent below what analysts had expected. In 2008, it expects $5.9 billion in unpaid credit card bills, compared with previous forecasts of $4.9 billion.

American Express also said Thursday that it's feeling the effect of bad loans. The company will be taking a $440 million charge in the fourth quarter. Consumers are heavily in debt, with $922 billion in "revolving credit" like credit cards, according to the Federal Reserve. They have been spending nearly everything they earn.

---EOE---

http://www.chicagotribune.com/business/yourmoney/chi-fri_gail_01-11jan11,0,5222451.column

[DJ13]

1. Credit Card Debt Grows, As Does Non-Payment

The delinquency rates and non payments would go down if the credit card industry would reduce rates to be affordable, and end their fee ripoffs.

Any sane industry that sees themselves pricing their product above the ability of their customers to pay lowers the price.

Especially in an industry who's commodity costs (Fed rates) are near record lows.

[Catherine Vincent]

2. My niece told me a couple of days ago she went over her limit

and Cap One charged her a f'ing $39 fee. :mad:

[Alessandro Machi]

4. It's way worse than that,

It's important to understand that being late on a payment or going over a credit card limit not only means a 39 dollar penalty, it also usually means a huge increase in the monthly interest rate which makes that 39 dollar fee look like a penny, seriously.

If they only charged her a late fee and did not raise her interest rate you should consider her lucky.

I may need to add a do's and dont's to my credit card protest website. (how does one spell dont's?)

[juno jones]

3. I had one of theirs cards (CO) once

Wound up actually having to PAY them extra just to get rid of it, I paid it off and asked them to close it but they kept finding extra (small but signifigant, a dollar or two for this and that) fees to bill me for. They wouldn't let us close the account without paying them off... And of course, by the time they recieved and posted each check, another small fee would have accrued. We finally got it ended but they had dragged the whole thing out for two or three months.

Screw Capitol One. Funny commercials, icky company.