Credit card debts are accelerating, the numbers of defaults are increasing at a staggering rate, and there are a number of uneasy whispers from insiders in the credit card industry.
The writing is on the wall, the red flags are raised, and the credit industry will be credit card debt.
Some financial firms have weathered well the recent financial crisis, companies like Bank of America and JPMorgan Chase.
But these same firms, and many others are largely exposed to the next crisis of toxic debt, outstanding credit debt.
The financial liability of toxic credit card debt is estimated at $950 billion.
Industry insiders are quickly making confidence statements stating that their firms are properly positioned to survive a meltdown their words are eerily familiar to statements made prior to the mortgage crisis.
Expecting increased losses from credit cards the big firms can be expected to do what they usually do to offset losses, as the consumer we can expect increased rates and fees.
Unfortunately this will only lead to higher default rates and more consumers walking away from their debt.
Innovest, an advisor report, is on the record saying credit cards are at a tipping point and default debt losses of $41 billion for the credit card industry is expected to double in 2009 to $96 billion.
Card debt is handled much in the same way as mortgage debt, the credit lines being bundled and sold to third parties but without the collateral of property.
Costs will be going up for the credit companies as it becomes more difficult to sell their debt in the aftermarket.
Changes in the debt card market can have a massive effect on the buying power of the US considering the prevalence of their use.
As rates go up for pre-existing debt and restrictions for approval of new credit lines shrink, we are quickly going to find ourselves in another bad credit crisis as this huge portfolio of bad debt is absorbed.
What does this mean for the average bad credit consumer? Prepare for jittery nerves from your credit card issuer.
Rates are expected to increase dramatically and credit limits will be much more difficult to get in the short term.
Also, a savvy consumer will need to watch for policy changes in their incoming credit cards statements.
Don't be shocked to discover your interest rate double or even triple if you are late on a payment, many card issuers are looking to risk rate hikes like this to weather the storm.
The writing is on the wall, but with preparedness you too can best position yourself for the upcoming credit card disaster.
The writing is on the wall, the red flags are raised, and the credit industry will be credit card debt.
Some financial firms have weathered well the recent financial crisis, companies like Bank of America and JPMorgan Chase.
But these same firms, and many others are largely exposed to the next crisis of toxic debt, outstanding credit debt.
The financial liability of toxic credit card debt is estimated at $950 billion.
Industry insiders are quickly making confidence statements stating that their firms are properly positioned to survive a meltdown their words are eerily familiar to statements made prior to the mortgage crisis.
Expecting increased losses from credit cards the big firms can be expected to do what they usually do to offset losses, as the consumer we can expect increased rates and fees.
Unfortunately this will only lead to higher default rates and more consumers walking away from their debt.
Innovest, an advisor report, is on the record saying credit cards are at a tipping point and default debt losses of $41 billion for the credit card industry is expected to double in 2009 to $96 billion.
Card debt is handled much in the same way as mortgage debt, the credit lines being bundled and sold to third parties but without the collateral of property.
Costs will be going up for the credit companies as it becomes more difficult to sell their debt in the aftermarket.
Changes in the debt card market can have a massive effect on the buying power of the US considering the prevalence of their use.
As rates go up for pre-existing debt and restrictions for approval of new credit lines shrink, we are quickly going to find ourselves in another bad credit crisis as this huge portfolio of bad debt is absorbed.
What does this mean for the average bad credit consumer? Prepare for jittery nerves from your credit card issuer.
Rates are expected to increase dramatically and credit limits will be much more difficult to get in the short term.
Also, a savvy consumer will need to watch for policy changes in their incoming credit cards statements.
Don't be shocked to discover your interest rate double or even triple if you are late on a payment, many card issuers are looking to risk rate hikes like this to weather the storm.
The writing is on the wall, but with preparedness you too can best position yourself for the upcoming credit card disaster.