Credit Card Delinquencies In 1Q Jump 11% From Year Earlier

Discussion in 'Wall St. News' started by Moc Yeah, Jun 8, 2009.

  1. More Green Shoots!
    This is becoming very laughable

    ( EN ) 06/08 15:34 =DJ Credit Card Delinquencies In 1Q Jump 11% From Year Earlier
    By Aparajita Saha-Bubna

    BOSTON (Dow Jones)--Delinquencies on plastic issued by banks jumped in the
    first quarter from a year ago as strapped borrowers used their tax refunds to
    meet daily expenses instead of paying down their credit card balances.
    For the first three months of the year, the delinquency rate in the U.S.
    rose to 1.32% for consumers who were three months or more behind payments on
    their cards, up 11% from 1.19% a year earlier, according to a report published
    Monday by credit-reporting bureau TransUnion LLC. The delinquency rate for the
    first quarter jumped 9.1% from the previous quarter.
    Higher delinquencies, fueled by rising unemployment and the economic slump,
    force issuers to squirrel away capital to reserve for potential losses;
    ultimately, companies must write off loans if customers can't pay up. That
    could mean more trouble for card issuers such as Citigroup Inc. (C), Bank of
    America Corp. (BAC), American Express Co. (AXP), Capital One Financial Corp.
    (COF), Discover Financial Services (DFS) and JPMorgan Chase & Co. (JPM).
    In addition, the report comes amid sweeping new restrictions on credit card
    companies that would ban extra fees and fluctuating rates. The new
    legislation, passed last month, is expected to bite into industry profits.
    "As expected, bankcard delinquencies increased in the first quarter both as
    a national average and in most areas of the country," said Ezra Becker,
    director of consulting and strategy in TransUnion's financial services group,
    in the research note. "This increase could be an indication that tax refund
    checks, typically used to pay down balances in during the first quarter in
    years past, are now being used to cover daily living expenses."
    Delinquencies were the highest in Nevada, followed by Florida and Arizona,
    states where large swaths of homeowners are also struggling with foreclosures.
    These statistics were culled from about 27 million individual credit files.
    TransUnion predicts the 90-day delinquency rate for credit cards issued by
    banks will rise to 1.7% by the end of the year.
  2. The adminstration is trying to paper over everything and rebubble that should be very obvious right now. no doubt they wont get it completetly right and there will be an event somewhere.
  3. They just reported this on ABC World News.

    Deadbeat #s will only grow for the next decade.

  4. I suspect Americans figure banks are getting free bonuses and money and that they will end up paying for it so it makes defauling on creditcards no longer a moral issue.
  5. mxjones