Banks Brace For Credit Card Default

[falcon]

Look for federal legislation to bailout those poorsouls who cannot pay off their credit cards.

The unemployment rate has long mirrored banks' loss rates on card balances. But Eddie Ward, 32 and jobless, may be one reason that rule of thumb no longer holds. For many lenders, losses are now starting to outpace layoffs.

Mr. Ward, of Arkansas, lost his job at a retail warehouse in April and so far has managed to make minimum payments on his credit card debt, which he estimates at $15,000 to $20,000. Asked whether he thinks he will be able to pay off his balance, he said, "Not unless I win the lottery."

http://finance.yahoo.com/banking-budgeting/article/107062/Banks-Brace-for-Credit-Card-Write-Offs

[burniegoeasily]

I saw this in the makings years ago. Not hard to see when the card companies issue cards to millions of people who have poor credit, or are very young. It always surprises me how many high school kids have credit cards. And I am not speaking of their parents cards, their very own card. I personally know of a 19 year old kid that has several cards, which all are maxed out. We are talking 10s of thousands of dollars in debt., and only 19 years old. Another situation where we are going to have to pay for the companies stupid practices.

[ipscshooter]

[bho]What you need to do is develop a little bit of empathy. It is the previous administration's fault that these fine folks have been given credit card limits in excess of what they are able to repay. It is the previous administration's fault that these fine folks have lost their jobs. It is the previous administration's fault that lenders were allowed to prey on unsuspecting consumers by forcing them to borrow exorbitant amounts of money. As a result, we must work together to fix this problem (with your money).[/bho]