Credit Card

US: Consumer, Celebrity Bankruptcies Rise 34%, May Hit 1.4 Million

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More green shoots!

Aug. 10 (Bloomberg) — Consumer bankruptcies show no sign of abating after rising more than a third this year and may hit 1.4 million by Dec. 31 as jobs are lost and loans are harder to get, according to the American Bankruptcy Institute.

More than 126,000 consumers filed for bankruptcy in the U.S. last month, 34 percent more than in July 2008, the ABI said in its latest report on Aug. 4. The increase came after a 36.5 percent rise in personal bankruptcies nationwide in the first six months, to 675,351, according to the ABI research group, which interprets data collected by the National Bankruptcy Research Center.

“Rising unemployment on top of high pre-existing debt burdens is a formula for higher bankruptcies through the end of this year,” ABI Executive Director Samuel Gerdano said in a statement. The group, composed of lawyers, accountants, bankers and judges, is based in Alexandria, Virginia.

Debt problems don’t stop with sub-prime borrowers. Celebrities who filed for bankruptcy in July included movie actor Stephen Baldwin, who sought protection from creditors after lenders began foreclosure procedures against his home. Lenny Dykstra filed for Chapter 11 bankruptcy in a petition that says the former Major League Baseball All-Star owes between $10 million and $50 million.

Read moreUS: Consumer, Celebrity Bankruptcies Rise 34%, May Hit 1.4 Million

U.S. credit card defaults rise to 20 year-high

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The economic crisis has only just begun.

Meredith Whitney, one of Wall Street’s best known and most bearish bank analysts, estimates that Americans’ credit card lines will be cut by $2.7 trillion, or 50 percent, by the end of 2010 — and fewer Americans will be offered new cards.

Related article: Meredith Whitney: Credit cards are the next credit crunch (Reuters)

* AmEx and Citi perform worse-than-expected – analysts

* JPMorgan and Capital One outperform expectations

* Default rates seen over 10 percent by year-end

NEW YORK, March 16 (Reuters) – U.S. credit card defaults rose in February to their highest level in at least 20 years, with losses particularly severe at American Express Co (AXP.N) and Citigroup (C.N) amid a deepening recession .

AmEx, the largest U.S. charge card operator by sales volume, said its net charge-off rate — debts companies believe they will never be able to collect — rose to 8.70 percent in February from 8.30 percent in January.

The credit card company’s shares wiped out early gains and ended down 3.3 percent as loan losses exceeded expectations. Moshe Orenbuch, an analyst at Credit Suisse, said American Express credit card losses were 10 basis points larger than forecast.

In addition, Citigroup Inc (C.N) — one of the largest issuers of MasterCard cards — disappointed analysts as its default rate soared to 9.33 percent in February, from 6.95 percent a month earlier, according to a report based on trusts representing a portion of securitized credit card debt.

Read moreU.S. credit card defaults rise to 20 year-high

Meredith Whitney: Credit cards are the next credit crunch

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(Reuters) – Prominent banking analyst Meredith Whitney warned that “credit cards are the next credit crunch,” as contracting credit lines will lower consumer spending and hurt the U.S. economy.

“Few doubt the importance of consumer spending to the U.S. economy and its multiplier effect on the global economy, but what is underappreciated is the role of credit-card availability in that spending,” Whitney wrote in the Wall Street Journal.

She said though credit was extended “too freely over the past 15 years” and rationalization of lending is unavoidable, what needs to be avoided was “taking credit away from people who have the ability to pay their bills.”

Whitney said available lines were reduced by nearly $500 billion in the fourth quarter of 2008 alone, and she estimates over $2 trillion of credit-card lines will be cut within 2009, and $2.7 trillion by the end of 2010.

“Inevitably, credit lines will continue to be reduced across the system, but the velocity at which it is already occurring and will continue to occur will result in unintended consequences for consumer confidence, spending and the overall economy,” Whitney said.

Currently, there is roughly $5 trillion in credit-card lines outstanding in the U.S., and a little more than $800 billion is currently drawn upon, she said.

“Lenders, regulators and politicians need to show thoughtful leadership now on this issue in order to derail what I believe will be at least a 57 percent contraction in credit-card lines,” she said.

Read moreMeredith Whitney: Credit cards are the next credit crunch

The Credit Card Debt Crisis: The Next Economic Domino

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Don’t forget another crisis, that will be much bigger than the subprime mortgage crisis:
– Mass Retail Closings: About 220,000 stores may close this year
– Interview with Gerald Celente: 2009 – The Worst Economic Collapse Ever (02/10/09)
– Retailers may close 73,000 stores; Wave of store closings, bankruptcies and takeovers

Hot on the heels of the banking crisis, the employment crisis, and the mortgage/foreclosure crisis, the country is on the verge of experiencing a credit card crisis.

According to the Federal Reserve, the total outstanding credit card debt carried by Americans reached a record $951 billion in 2008 — a number that will only climb higher as more and more people reach for the plastic to make ends meet. What’s more, roughly a third of that is debt held by risky borrowers with low credit ratings.

Related article:
American Express paying card holders to close their accounts (Reuters)

Credit card defaults are on the rise and are expected to hit 10 percent this year. This will obviously drive many banks closer to failing their stress tests — but it will have an even greater impact on the lives of people who find themselves sinking deeper and deeper into debt.

Read moreThe Credit Card Debt Crisis: The Next Economic Domino

American Express paying card holders to close their accounts

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NEW YORK (Reuters) – American Express Co, battered by mounting credit card losses, is offering $300 to a limited number of U.S. card holders who pay off their balances and close their accounts, the company said on Monday.

“We sent the offer out to a select number of card members,” said Molly Faust, a company spokeswoman. “We are looking at different ways that we can manage credit risk based on the costumers overall credit profile.”

The company did not say how many card holders would receive the offer and did not disclose the total of their card balances.

Read moreAmerican Express paying card holders to close their accounts

Lenders abruptly cut lines of credit, fear excessive use amid hard times

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Banks and other lenders nationwide, seeking to reduce their debt exposure, are shutting off and limiting consumer credit card lines, even for many customers who carry low balances and pay on time.

As much as $2 trillion in consumer credit – nearly half of what is available – could be rescinded, according to an estimate by a prominent banking analyst. Just two years ago, institutions were handing out liberal borrowing lines to almost anyone. But now, drowning in debt and soured investments, lenders are seeking to stop consumers from running up big balances in hard times, bills they might not be able to pay.

The credit squeeze doesn’t just limit spending potential; it can also damage cardholders’ credit ratings by making them appear to be riskier borrowers. And in many cases, the institutions pulling back on credit took government bailout funds that were supposed to encourage them to lend more freely.

Read moreLenders abruptly cut lines of credit, fear excessive use amid hard times

Credit-card industry may cut $2 trillion lines: analyst

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Michael Lipsitz signs his credit card bill for the groceries he purchased at the WalMart in Crossville, Tennessee March 21, 2008. REUTERS/Brian Snyder

(Reuters) – The U.S. credit-card industry may pull back well over $2 trillion of lines over the next 18 months due to risk aversion and regulatory changes, leading to sharp declines in consumer spending, prominent banking analyst Meredith Whitney said.

The credit card is the second key source of consumer liquidity, the first being jobs, the Oppenheimer & Co analyst noted.

“In other words, we expect available consumer liquidity in the form of credit-card lines to decline by 45 percent.”

Bank of America Corp, Citigroup Inc and JPMorgan Chase & Co represent over half of the estimated U.S. card outstandings as of September 30, and each company has discussed reducing card exposure or slowing growth, Whitney said.

Closing millions of accounts, cutting credit lines and raising interest rates are just some of the moves credit card issuers are using to try to inoculate themselves from a tsunami of expected consumer defaults.

Read moreCredit-card industry may cut $2 trillion lines: analyst

Identities sold online for £80

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Complete identities are being sold online for just £80, internet experts have discovered.


The stolen personal data include credit card details, plus the cardholder’s name, address, passport and driving licence numbers.

Once stolen, the average identity yields online fraudsters around £15,000, researchers found.

Individual pieces of stolen data are available for as little as £5.

A study for Get Safe Online Week found one in five people use the same password for all their internet logins, leaving them wide open to hacking.

Half those surveyed did not update their anti-virus software often enough.

And nearly a quarter did not have any protection against spyware.

Read moreIdentities sold online for £80

Banks pull squeeze play on credit cards

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J.L. Fish thought she was a fine credit card customer, and that Wells Fargo shared that high opinion. That’s why the Mankato retiree was stunned to see the bank raise the interest rate on her Platinum VISA from 5.2 percent on her June bill to 17.69 percent come July.

Companies cracking down, even on those with good credit, leaving customers to face interest rate leaps, lower credit limits and even canceled cards.

“I nearly fainted,” said Fish, 61, who lives on about $1,400 a month from Social Security and a small disability pension. She has made the minimum payment each month without fail on about an $8,000 balance, she said. But the interest rate jump nearly doubled her monthly minimum from $115 to $198 –more than she can cover. So, she took the bank’s offer for an “opt out” — which involved canceling the card and then setting up a new billing schedule until she pays off her entire debt.

“I have never been late in my payments,” said Fish, noting payments are automatically deducted from her bank account. “Why did Wells Fargo do this to me?”

The answer is bigger than Fish. Banks nationwide are sweeping across their credit card accounts and tightening lending standards — leaving customers to face interest rate leaps, lower credit limits, and even canceled cards. A Federal Reserve Bank survey showed 83 percent of major card issuers tightening their lending standards in the third quarter of this year, up from 45 percent in the second quarter.

Economists partly blame the credit markets — where banks buy money to lend — which came to a virtual standstill as the world’s stock markets crumbled. But others hear an ominous echo of the subprime mortgage meltdown — with banks now backpedaling from similarly lax lending with credit cards that have left them with exploding losses.

“There is a credit card equivalent of a toxic subprime mortgage,” concluded a report earlier this month by Gregory Larkin, senior analyst at Innovest Strategic Value Advisors, an investment advisory firm in New York. “This is precisely what we need to be looking at right now.”

Read moreBanks pull squeeze play on credit cards

Banks exploit legal loophole to seize homes

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Banks and credit card companies are exploiting obscure legal powers to seize the homes of thousands of people who cannot pay their credit card bills.

In some cases, people owing as little as £1,000 have been served with charging orders – the legal instrument enabling a creditor to order the sale of a property.

The practice has emerged days after Yvette Cooper, chief secretary to the Treasury, called on banks to do more to allow people to keep their homes.

According to the Ministry of Justice, 97,026 charging orders were granted by courts in England and Wales last year, a tenfold increase since 2000.

They allow financial institutions to order the sale of a property to pay off unsecured debts on credit cards, personal loans, store cards and car finance. Some will have been used only to threaten the debtor, or to levy a surcharge on the mortgage to recoup the debts.

Nationwide, the building society, and Northern Rock, which was nationalised earlier this year, are among the most aggressive in using the court orders.

Read moreBanks exploit legal loophole to seize homes

Bank of America Credit-Card Unit Loses $373 Million

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Related article: Banks Hoard Cash as Credit Card Defaults Rise

“We have to be prepared that it gets a lot worse,” J.P. Morgan chief executive Jamie Dimon said about the overall economic outlook.
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Oct. 21 (Bloomberg) — Bank of America Corp., the largest U.S. consumer bank, lost money in its credit-card unit for the first time since its January 2006 purchase of MBNA Corp. as more borrowers missed payments amid the slowing economy.

Card services, which includes unsecured loans, lost $373 million in the third quarter, compared with a profit of $1.04 billion in the same period last year, the Charlotte, North Carolina-based company said today in a regulatory filing. Defaults on cards, consumer loans and home mortgages contributed to a 47 percent decline in operating profit at the consumer and small-business division.

Bank of America provided more details on its third-quarter results today, two weeks after reporting a 68 percent decline in profit. Those earnings, released early as the bank announced plans to raise $10 billion by selling common shares, were worse than analysts expected. The world’s biggest financial companies have disclosed $661 billion in losses and raised $634 billion in fresh capital.

“Credit cards have typically been among the most profitable parts of Bank of America’s business,” said Jim Campen, executive director of Americans for Fairness in Lending, a Boston-based nonprofit that studies the credit card industry. “As we enter the biggest financial crisis since the Great Depression, more people aren’t going to be able to pay their credit cards.”

Read moreBank of America Credit-Card Unit Loses $373 Million

Banks Hoard Cash as Credit Card Defaults Rise

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Consumers are increasingly unable to pay off their credit cards, forcing banks to hoard cash to protect against future losses and lend to fewer people, according to reports yesterday from several of the nation’s largest banks.

These financial disclosures showed a spike in credit card loans going bad, putting further pressure on already-stressed balance sheets. J.P. Morgan Chase said the number of credit card loans in default rose 45 percent in the third quarter from the comparable period a year ago and predicted that default rates would sharply accelerate through 2009, with 7 percent of credit card loans going bad.

“We have to be prepared that it gets a lot worse,” J.P. Morgan chief executive Jamie Dimon said about the overall economic outlook.

Read moreBanks Hoard Cash as Credit Card Defaults Rise

American Express: The Economy is Worsening

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June 25 (Bloomberg) — American Express Co., the biggest U.S. credit-card company by purchases and cash advances, said customers are falling further behind on their debt, signaling the economy is worsening.

“Business conditions continue to weaken in the U.S. and so far this month we have seen credit indicators deteriorate beyond our expectations,” Chief Executive Officer Kenneth Chenault said in a statement today announcing the company would receive as much as $1.8 billion in a settlement with competitor MasterCard Inc.

American Express and rivals Capital One Financial Corp. and Discover Financial Services have fallen by more than a third in the past 12 months in New York trading as consumers absorb the housing slump, rising unemployment and higher food and fuel bills. New York-based American Express adopted a “cautious view” for the year in January after cardholder spending slowed and overdue payments rose in December.

“If you look at the employment situation, clearly that’s deteriorated, and consumer confidence is down as well,” said Sanjay Sakhrani, an analyst with KBW Inc. in New York who has a “market perform” rating on the stock. “Both play a key role in the credit-card industry.”

The Federal Reserve today left its benchmark interest rate at 2 percent, saying “uncertainty about the inflation outlook remains high.” Consumer prices rose 4.2 percent in the 12 months ended in May, the fastest pace since January, while the unemployment rate rose by the most in more than two decades.

Consumer Confidence

Confidence among Americans dropped to the lowest level in 16 years, the Conference Board said yesterday.

Read moreAmerican Express: The Economy is Worsening

The Ultimate Goal of the Elite: Total Power

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The Dollar will be destroyed.

There will be a controlled collapse of the stock market and the economy.

Then there will be no more objections to a cashless totally controlled and monitored society anymore:

First the debit card and then the implanted microchip, that by the way causes cancer and opens the door to control your thoughts, feelings and behavior. This is the ultimate Mind Control.

That’s how it is all planned by the elite. This is called the New World Order. – The Infinite Unknown

Related articles:
– CASPIAN RELEASES MICROCHIP CANCER REPORT
– The Microchip: Health, Privacy, Civil Rights And Freedom Under Siege
 U.K. to Begin Microchipping Prisoners
– Met Police officers to be ‘microchipped’ by top brass in Big Brother style tracking scheme
 Every single Metropolitan police officer will be ‘microchipped’….
…there will not be any choice about wearing one.
– UK: Compulsory microchipping of dogs
– U.S. School District to Begin Microchipping Students
 So far the RFID chips are only implanted in the schoolbag to monitor the students movements.
– The Microchip is here !!! – New World Order

Elites Seek Control Over Rising Cashless Society

Source: Rogue Government
06-24-2008
Lee Rogers

The terrorists in the federal government are continuing their push to implement a cashless economic enslavement system. According to a legislative notice from the U.S. Senate, a new Housing Bill (HR 3221) contains a provision that will require nearly every online credit card transaction to be reported directly to the Internal Revenue Service. The insanity of this is obvious and it is nothing more than a way to give the government a means to track and trace as many private transactions as humanly possible. Previously, Visa’s CEO has stated that it is their goal to establish a cashless society by the year 2012. As technology increases, a greater number of businesses are accepting credit card payments. It wasn’t too long ago that fast food restaurants wouldn’t accept anything but cash for payment, now almost all of them accept credit cards. We are also starting to see biometrics utilized as a way to facilitate transactions. The bottom line is that there is an agenda at play to setup a cashless system that will allow the elite to take total control over the global economy. These people want to eliminate privacy in mutual exchanges and this is another step in doing just that.

The following is taken off of the legislative notice from the U.S. Senate Bill summary describing this draconian reporting scheme within HR 3221.

The proposal requires information reporting on payment card and third party network transactions. Payment settlement entities, including merchant acquiring banks and third party settlement organizations, or third party payment facilitators acting on their behalf, will be required to report the annual gross amount of reportable transactions to the IRS and to the participating payee. Reportable transactions include any payment card transaction and any third party network transaction. Participating payees include persons who accept a payment card as payment and third party networks who accept payment from a third party settlement organization in settlement of transactions. A payment card means any card issued pursuant to an agreement or arrangement which provides for standards and mechanisms for settling the transactions. Use of an account number or other indicia associated with a payment card will be treated in the same manner as a payment card. A de minimis exception for transactions of $10,000 or less and 200 transactions or less applies to payments by third party settlement organizations. The proposal applies to returns for calendar years beginning after December 31, 2010. Back-up withholding provisions apply to amounts paid after December 31, 2011. This proposal is estimated to raise $9.802 billion over ten years.

Groups like Freedomworks and companies like EBay have already come out denouncing this provision. The bottom line is that the federal government has no right to demand this type of information. Not only that, but how does the IRS intend on securing this information that they are going to collect from all of these online transactions? The whole concept is ridiculous and an obvious invasion of privacy. This is just another control mechanism that is being put in place so the establishment can eventually have the capabilities to track and trace every single electronic transaction. Clearly, a totalitarian big brother system is being put into place, and these criminals in Washington DC are just trying to take it to another level by hiding this provision in a 600+ page bill. It is a disgrace.

A few months ago, Elliot Spitzer the former New York Governor was forced out because his financial transactions were tracked back to the purchase of prostitution services. The banks already have the ability to track and trace transactions with impunity. This provision will centralize control to track and trace almost all electronic financial transactions and that is not a good thing.

It is unfortunate that we have a bunch of control freak Nazis that want to do these things, but this is the agenda. The modern day priest class that is in control seeks the total destruction of economic privacy and they are doing an excellent job at doing just that. They’ve managed to get everybody addicted to this cashless society and now they are bringing in the enslavement apparatus to track and trace activity within it. At first all transactions will be conducted using credit and debit cards, then it will be by way of biometrics, then it will be an implantable microchip. Or who knows, maybe they’ll just skip biometrics and go directly to an implantable microchip. Either way, the agenda is painfully clear, and it is completely unacceptable. Hopefully this legislation will get defeated, but we shouldn’t be holding our breath either. HR 3221 looks to be on the fast track to getting signed into law.

Much more powerful than power is love.

Power guided by love would create an enlightened society, instead of the ultimate tyranny.

It is very important that…

…”No problem can be solved from the same level of consciousness that created it.” – Albert Einstein

The Infinite Unknown
June 25, 2008

$75 limit on credit card charges at gas pump causes frustration

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LOS ANGELES – As if sky-high gasoline prices weren’t frustrating enough, many owners of thirsty SUVs, pickups and motor homes who use a credit card at the pump are being blocked from getting a full tank.

That’s because many station operators have a $75 limit on Visa (V) or MasterCard (MA) transactions at the pump.

If motorists hit the limit, they must do a second transaction at the pump to finish filling. Another solution, though inconvenient: Go see the attendant to have the card swiped inside. But this information often is not on the pump, and it can be aggravating even if it is, so customers are venting their ire.

“It’s frustrating to them, and they let us know,” says Tom Robinson, president of Rotten Robbie, a 34-station chain based in Northern California. “There’s always an adjective associated with the pump, and it’s like ‘stupid’ or worse.”

Station owners say they simply are passing through policies of Visa and MasterCard, which won’t reimburse them more than $75 per transaction at the pump if there’s a disputed charge or a fraudulent card is used.

May 30, 08

Source: USA Today

U.S. Credit Card Debt Soars to Unprecedented Heights

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WASHINGTON—Studies indicate that credit card defaults and related write-offs increased drastically since 2006. Today, lenders write off 33 percent more in credit card debt than they did two years ago.

Statistics show that about 35 percent of all credit card holders are already exhibiting signs of possible default. Late credit card payments result in fees many consumers can’t afford.

Credit card debt accelerated to unprecedented heights since bank loans began to dry up due to mortgage defaults. Total U.S. credit card debt reached almost $800 billion in November 2007, up from around $680 billion in March of last year, according to the latest available government statistics.

In the aftermath of the U.S. mortgage crisis, the credit card bubble may be next to burst. In the past few years, banks have aggressively marketed credit card ownership and usage to consumers with limited income and low credit scores. Credit card standards remain lax, while loan standards have tightened to a degree.

Read moreU.S. Credit Card Debt Soars to Unprecedented Heights

Brace for $1 Trillion Writedown of `Yertle the Turtle’ Debt

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Be it ever so devalued, $1 trillion is a lot of dough.

That’s roughly on a par with the Russian economy. More than double the market value of Exxon Mobil Corp. About nine times the combined wealth of Warren Buffett and Bill Gates.

Yet $1 trillion is the amount of defaults and writedowns Americans will likely witness before they emerge at the far side of the bursting credit bubble, estimates Charles R. Morris in his shrewd primer, “The Trillion Dollar Meltdown.” That calculation assumes an orderly unwinding, which he doesn’t expect.

“The sad truth,” he writes, “is that subprime is just the first big boulder in an avalanche of asset writedowns that will rattle on through much of 2008.”

Expect the landslide to cascade through high-yield bonds, commercial mortgages, leveraged loans, credit cards and — the big unknown — credit-default swaps, Morris says. The notional value for those swaps, which are meant to insure bondholders against default, covered about $45 trillion in portfolios as of mid-2007, up from some $1 trillion in 2001, he writes.

Morris can’t be dismissed as a crank. A lawyer, former banker and author of 10 other books, he knows a thing or two about the complex instruments that have spread toxic debt throughout the credit system. He once ran a company that made software for creating and analyzing securitized asset pools. Yet he writes with tight clarity and blistering pace.

Read moreBrace for $1 Trillion Writedown of `Yertle the Turtle’ Debt