CC deliquencies up 26%

[disneysteve]

I heard on the news this morning that credit card deliquencies are up 26% from a year ago. They suggested that it might be related to the housing problems. I guess that makes sense. All the folks who bought houses they couldn't afford may have found themselves turning to credit cards to make ends meet. But if they couldn't afford the houses and ended up in foreclosure, they probably couldn't afford the CC bills either.

Here is an article about it:
U.S. credit card delinquencies, defaults accelerate_English_Xinhua

[gackle]

I read that article last night. I don't think it's necessarily related to the housing problem, but a symptom of the general apathy towards debt in this country - starting all the way from the top in our government. It's unsettling to think that we can be fiscally responsible, but still be affected (the economy affects everybody) by other's irresponsibility.

[disneysteve]

I don't think it's necessarily related to the housing problem

I think it is to some extent.

The article said, " Experts say these signs of the failing finances of many households are partly because of the subprime mortgage crisis Experts say these signs of the failing finances of many households are partly because of the subprime mortgage crisis " and I think that makes sense.

If you (general you) had an ARM and your rate jumped up a point or two, you may now find yourself struggling to make ends meet and using the credit card to carry your through. In the process, you are racking up more debt that you can't afford. And if you are late on your mortgage or in foreclosure, I'm sure your CC rate is sky high, in the 30% neighborhood.

At some point, that house of cards (living on debt) collapses. You lose your home and default on your CC payments.

[gackle]

On the other hand, just going on perception, a lot of the debt problems that people have start in college when most people aren't financially mature yet and they fall victim to the predatory credit card companies. Most students don't have a mortgage at that time. So for these people their debt problems start with credit cards, not mortgage. Of course not everybody goes to college and there's plenty of examples to support any scenario that may arise. The common denominator is that most of these people have made risky and questionable decisions with regard to credit.

[Bookie]

One of the MSN commentators observed that as the housing ATM shuts down and credit lines become more difficult and expensive to obtain, the credit card issuers have become lenders of last resort to a growing segment of the population.

.

[filifefc]

One of the MSN commentators observed that as the housing ATM shuts down and credit lines become more difficult and expensive to obtain, the credit card issuers have become lenders of last resort to a growing segment of the population.

.

Saw that too. Found that very true, credit cards make it so easy to borrow money, and that's where people get into even more trouble. Lenders don't lend certain people money for a good reason.

[Pleasenodebt]

Credit cards do make it very easy to borrow money. In regards to housing i think that some folks have devoted credit card payments to the mortgage with some home payments rising. I also noticed another article saying that credit card companies offer pre-paid gift cards and roughly 28% are never used. Meaning people put them in there pockets and forget about them. I saw that Amex reported tens of millions in gift card sales and about 31% was never used. Talk about profit margins wow!