Yeah it's rare that a card company will close your credit card account just because your credit gets shot...it's more profitable for them to raise your rate to something ridiculous, and people don't really care about that..they sit around and complain about it, but as long as they have credit available on their cards...they don't really care what the rate is... Some of the more reputable places may close your card, especially if you're dealing with a credit union, as they are "not-for-profit"...but a bank, they don't give a rats ass how bad your credit is, as long as they think you can make your 2% minimum payments each month...which that's a whole hell of a lot of credit card debt... Think about it...you may not be able to make a $1500/mo mortgage payment, but on the other hand, you're looking at having up to $50,000 in credit card debt costing you only $1000 a month at 2% each month...that's a lot of rent payments and trips to the mall....that $500/mo less may make all the difference in the world.... To many people, it's a lot more important to be able to go shopping and pretend they are rich to impress their friends than to make a pesky house payment. That is why many people would rather have their home foreclosed on than miss credit card payments...hell you can file bankruptcy and once it's discharged get loaded up to the hilt on debt.....oh and with excellent credit to boot. Usually even better than people who actually pay their debt.
I am guessing they will have to bring back the old bankruptcy laws. A good friend of mine went belly up in the late 90's. It was a joke, it cost just over 500 dollars and he showed in court for a brief questioning and was debt free. Apparently, now it is not so simple and much more expensive. We could bring back the old rules and let most of America go belly up and then ---they can go back to spending lots of money on their new higher interest credit cards. Oh and my buddy got new credit cards again almost immediately. Albeit they had higher rates and lower limits. Interesting enough, I saw virtually no disadvantage in his life other than higher interest rates.
What's up TGM? Yeah I agree, I mean if the people aren't going to pay their bills anyway, then why would they get all worked up over interest rates? The main goal is to be able to buy everything in sight and live the high-end life they "deserve".
TODAY 2 great companies have warned in this area: COF and AXP keep in mind its going to get alot worse in this area as well.
HMMMMMMMM ....like they didn't see this coming, this is so obvious, this is the next problem for the economy, without the use of borrowing money against your house or the use of a credit cards because there is already thousands of dollars worth of debt on them where is the consumer left to go? the answer: no where, this will surely bring GDP down since consumer spending makes up 2/3 of that and most likely a continued recession into 2009. The 915 billion worth of credit card debt in november 2007 is nearing 947 billion, up 7.1% in January ALONE.... Fed's Rosengren: Credit Card Defaults Rising Thu Mar 6, 2008 6:00pm EST QUINCY, Massachusetts (Reuters) - Federal Reserve Bank of Boston President Eric Rosengren said on Thursday that credit card delinquencies are beginning to rise as the economy slows and the housing market crisis worsens. "We are starting to see an uptick," Rosengren said when asked if consumers are starting to fall behind in their credit card payments. "It is nowhere near what we are seeing in the housing market but credit card delinquencies are starting to tick up especially in areas where foreclosures are heavy," Rosengren said while answering questions following a speech to a local business group.
the problem now is that people are trying like hell to make minimum payments in order to keep their cards going; not to buy things but to actually pay for necessities. people are using their cards to pay for utility bills and car payments. this is a huge problem and because everyone is maxed out and banks tightened standards so much that consumers can't get any other loans to keep the charade going.
No he was refering to stock_trad3r, if you want a good laugh do a search for all of stock_trad3r old posts.
Post is nearly a year old. Just wanted to remind everyone once again that over $1 trillion worth of credit card debt is going to be the next major concern. Steps should be taken tomorrow to control what is going to happen in this area.
I have $0 credit card debt, or any debt other than my mortgage that I have been paying on time every month for 17 years. However, I 'm sure the new United States of Socialist America will take my tax dollars to bail out the overextended credit card losers.