Bank Card Delinquencies Dip to 8-Year Low

[topspin]

Bank Card Delinquencies Dip to 8-Year Low
Published: Wednesday, 7 Jul 2010 | 6:39 AM ET Text Size By: ReutersDiggBuzz FacebookTwitter More Share
U.S. bank card delinquencies dipped in the first quarter of this year to the lowest level in eight years, reflecting measured improvement in the overall economy.



The American Bankers Association said consumer loan delinquencies improved for the third quarter in a row, falling to 2.98 percent of all accounts from 3.19 percent the prior quarter.

Delinquencies are defined as a late payment that is 30 days or more past due.

News Headlines

 

[editec]

That's probably because so many people are now in total default that they are no longer delinquint.

Once the debt gets sold to the bottom feeding credit recovery agencies those accounts are no longer ON the CCC's books.

 

[topspin]

That's probably because so many people are now in total default that they are no longer delinquint.

Once the debt gets sold to the bottom feeding credit recovery agencies those accounts are no longer ON the CCC's books.

wow, I should be loading up on stocks. When good news is turned into bombs the fear is near peaking.
People are watching thier big purchases ie. auto's way down, housing way down.

Remember 90% ish are still working and making more.

 

[eagleseven]

 

[Pepe]

Last time I looked the Default Rate on Credit Cards was a little over 9% but that was last May.

However, the Issuers have sent millions of Notices cancelling Accounts as well as lowering Credit Lines since that time.

Throw in some 3 Million Bankruptcies over the last two years and shazaam, you get some "Kumbaya" numbers for the "Sheeple's" consumption. Anything to get the Sheep back into the Mall to shop until they drop.

 

[mascale]

Lending is back. Consumers now repay.

"Crow, James Crow: Shaken, Not Stirred!"
(Her Majesty's PM had been cautioning this at Davos, two years ago, in fact. Mostly the Bankers of the United States had failed to show up, having already been encouraged to shoot the Troubled Assets, and bank the bonus for themselves!)

 

[CMike]

Probably because so many people can't get credit now.

 

[Jeremy]

Bank Card Delinquencies Dip to 8-Year Low
Published: Wednesday, 7 Jul 2010 | 6:39 AM ET Text Size By: ReutersDiggBuzz FacebookTwitter More Share
U.S. bank card delinquencies dipped in the first quarter of this year to the lowest level in eight years, reflecting measured improvement in the overall economy.



The American Bankers Association said consumer loan delinquencies improved for the third quarter in a row, falling to 2.98 percent of all accounts from 3.19 percent the prior quarter.

Delinquencies are defined as a late payment that is 30 days or more past due.

News Headlines

I work in retail payment solutions (credit cards) for a major FI and I can tell you it has nothing to do with economic improvements. The massive amounts of accounts that originally went delinquent at the begining of the financial crisis are now coming off of the books due to charge offs. Not to mention the freezing of credit, line management reductions and the landslide of internal "workout" or "hardship" programs that will allow a cardholder to break away from the contract they originally agreed to and go on a reduced payment plan in exchange for closing the account. Thus keeping the account from being reported as 30 days delinquent to the bureaus. This article is pure propoganda. But I'm not surprised based of it's source.

"Banks are putting losses behind them and following a prudent approach to new loans because the on-again, off-again economy is keeping risk high,'' he said.

 

[KissMy]

Probably because so many people can't get credit now.

You nailed it there.

Meredith Whitney - Large numbers of people getting kicked out of the financial system

Meredith Whitney said Primary among her concerns is the lack of credit access for consumers who she said are "getting kicked out of the financial system." She said that will be the prevailing trend in 2010.

Despite being able to borrow at near-zero percent interest, banks are not taking that money and putting it back into the marketplace. The Federal Reserve said Monday that consumer lending dropped 1.7 percent on an annualized basis in October, the ninth straight monthly decline.

Meredith Whitney said "For a 2010 prediction, which is so disturbing on so many levels to have so many Americans be kicked out of the financial system and the consequences both political and economic of that, it's a real issue. You can't get around it. This has never happened before in this country."

 

[CMike]

Probably because so many people can't get credit now.

You nailed it there.

Meredith Whitney - Large numbers of people getting kicked out of the financial system

Meredith Whitney said Primary among her concerns is the lack of credit access for consumers who she said are "getting kicked out of the financial system." She said that will be the prevailing trend in 2010.

Despite being able to borrow at near-zero percent interest, banks are not taking that money and putting it back into the marketplace. The Federal Reserve said Monday that consumer lending dropped 1.7 percent on an annualized basis in October, the ninth straight monthly decline.

Meredith Whitney said "For a 2010 prediction, which is so disturbing on so many levels to have so many Americans be kicked out of the financial system and the consequences both political and economic of that, it's a real issue. You can't get around it. This has never happened before in this country."

And that is the major reason for the economic demise.

Obama started mircromanaging banks, so now they are afraid to lend money to people who need them.

Businesses need cash flow via loans. No cash flow via loans, bye bye jobs.

 

[william the wie]

Credit cards may soon be extinct. Their fees to businesses are a straight loss for the vendors relative to debit cards, checks and cash. With those fees under heavier attack by the day the whole industry is likely to go bye-bye.

 

[KissMy]

This topic came up over the 4th of July holiday while I was visiting. I have friends & family cutting up credit cards due to the new fees & rates. Many have had their credit limit slashed to less than what they owe on the cards. This means getting socked with over-limit fees in addition to sky high interest. They can not get new credit. People are paying these down to get out from under these new burdens. They are not going shopping or borrowing again.

 

[Quantum Windbag]

Bank Card Delinquencies Dip to 8-Year Low
Published: Wednesday, 7 Jul 2010 | 6:39 AM ET Text Size By: ReutersDiggBuzz FacebookTwitter More Share
U.S. bank card delinquencies dipped in the first quarter of this year to the lowest level in eight years, reflecting measured improvement in the overall economy.



The American Bankers Association said consumer loan delinquencies improved for the third quarter in a row, falling to 2.98 percent of all accounts from 3.19 percent the prior quarter.

Delinquencies are defined as a late payment that is 30 days or more past due.

News Headlines

You do know that Obama doesn't want people to save money and spend down debt because that is not good for the overall economy, right? This reflects a trend that has been going on for years, and reflects less consumer confidence, resulting on the drop in factory orders that was also posted last month.

In other words, this is only good news if you are pretty desperate to twist bad news into good news. The only people who really benefit from this are banks, and they might be willing to to lend more as a result. We will see.

 

[william the wie]

Bank Card Delinquencies Dip to 8-Year Low
Published: Wednesday, 7 Jul 2010 | 6:39 AM ET Text Size By: ReutersDiggBuzz FacebookTwitter More Share
U.S. bank card delinquencies dipped in the first quarter of this year to the lowest level in eight years, reflecting measured improvement in the overall economy.



The American Bankers Association said consumer loan delinquencies improved for the third quarter in a row, falling to 2.98 percent of all accounts from 3.19 percent the prior quarter.

Delinquencies are defined as a late payment that is 30 days or more past due.

News Headlines

You do know that Obama doesn't want people to save money and spend down debt because that is not good for the overall economy, right? This reflects a trend that has been going on for years, and reflects less consumer confidence, resulting on the drop in factory orders that was also posted last month.

In other words, this is only good news if you are pretty desperate to twist bad news into good news. The only people who really benefit from this are banks, and they might be willing to to lend more as a result. We will see.

How do banks profit from losing one of their biggest cash cows? And among the lowest risk loans banks can make so if banks are cutting back on credit card loans that is an act of desperation since the alternatives are accepting much lower returns with safety or slightly lower returns at a big increase in risk. You really lost me on that one.

Credit cards and free checking are the biggest and most dependable source of free cash the banks got going. Where else do banks lend to get double digit returns? They are among the safest personal loans possible due to the civil and criminal code and as such are much more valuable in the repo market. With penalties and interest the average credit card debt turns a profit at $0.4-0.5/$ when sold to collection agencies. For most loans the breakeven point is $1.x/$ for sales to collection agencies and often x>1.

Do you really believe banks can find other sources of 18+% returns for money at risk? And short of treasuries where are they going to find lower risk loans to make?

 

[Baruch Menachem]

They also have double digit losses. A friend worked at a credit card co that specialized in riskier borrowers. They counted on gathering up all the fees and extra charges.

They got closed down by 7 different regulatory agencies because of abusing consumers and bad capital ratios. They went broke from this model It is not a profitable one.


This is the model that took Wachovia from $90 a share to 40 cents in six months.

 

[CMike]

Bank Card Delinquencies Dip to 8-Year Low
Published: Wednesday, 7 Jul 2010 | 6:39 AM ET Text Size By: ReutersDiggBuzz FacebookTwitter More Share
U.S. bank card delinquencies dipped in the first quarter of this year to the lowest level in eight years, reflecting measured improvement in the overall economy.



The American Bankers Association said consumer loan delinquencies improved for the third quarter in a row, falling to 2.98 percent of all accounts from 3.19 percent the prior quarter.

Delinquencies are defined as a late payment that is 30 days or more past due.

News Headlines

You do know that Obama doesn't want people to save money and spend down debt because that is not good for the overall economy, right? This reflects a trend that has been going on for years, and reflects less consumer confidence, resulting on the drop in factory orders that was also posted last month.

In other words, this is only good news if you are pretty desperate to twist bad news into good news. The only people who really benefit from this are banks, and they might be willing to to lend more as a result. We will see.

How do banks profit from losing one of their biggest cash cows? And among the lowest risk loans banks can make so if banks are cutting back on credit card loans that is an act of desperation since the alternatives are accepting much lower returns with safety or slightly lower returns at a big increase in risk. You really lost me on that one.

Credit cards and free checking are the biggest and most dependable source of free cash the banks got going. Where else do banks lend to get double digit returns? They are among the safest personal loans possible due to the civil and criminal code and as such are much more valuable in the repo market. With penalties and interest the average credit card debt turns a profit at $0.4-0.5/$ when sold to collection agencies. For most loans the breakeven point is $1.x/$ for sales to collection agencies and often x>1.

Do you really believe banks can find other sources of 18+% returns for money at risk? And short of treasuries where are they going to find lower risk loans to make?

I don't have any stats on it, but I would assume that it forces people into bankruptcy.

 

[KissMy]

That's probably because so many people are now in total default that they are no longer delinquint.

Once the debt gets sold to the bottom feeding credit recovery agencies those accounts are no longer ON the CCC's books.

wow, I should be loading up on stocks. When good news is turned into bombs the fear is near peaking.
People are watching thier big purchases ie. auto's way down, housing way down.

Remember 90% ish are still working and making more.

The OP topspin likely never attained a G.E.D. equivalent education if he believes the drivel he posted. He doesn't know the difference between "People are watching their big purchases" & "bad debt sold off & consumer credit being slashed". Top spin also has a lot of spelling problems.

 

[editec]

Bank Card Delinquencies Dip to 8-Year Low
Published: Wednesday, 7 Jul 2010 | 6:39 AM ET Text Size By: ReutersDiggBuzz FacebookTwitter More Share
U.S. bank card delinquencies dipped in the first quarter of this year to the lowest level in eight years, reflecting measured improvement in the overall economy.



The American Bankers Association said consumer loan delinquencies improved for the third quarter in a row, falling to 2.98 percent of all accounts from 3.19 percent the prior quarter.

Delinquencies are defined as a late payment that is 30 days or more past due.

News Headlines

I work in retail payment solutions (credit cards) for a major FI and I can tell you it has nothing to do with economic improvements. The massive amounts of accounts that originally went delinquent at the begining of the financial crisis are now coming off of the books due to charge offs. Not to mention the freezing of credit, line management reductions and the landslide of internal "workout" or "hardship" programs that will allow a cardholder to break away from the contract they originally agreed to and go on a reduced payment plan in exchange for closing the account. Thus keeping the account from being reported as 30 days delinquent to the bureaus. This article is pure propoganda. But I'm not surprised based of it's source.

"Banks are putting losses behind them and following a prudent approach to new loans because the on-again, off-again economy is keeping risk high,'' he said.

Just as I suspected.

 

[mascale]

The IMF puts planet economic growth at above 4.5 percent, likely not including areas where it is not.

The two year, Great Goose, is having its effect, in areas of the Great Socialist Credit Markets. Consumer Loans are a part of that. The failed have been tolerated, who heeded to the love that the world needs now, and got written off. The Troubled Assets are being sent out, clearly to be shot. The Republican/Tea Party/RNC/GOP/Chairman Steele, apprently inclusive, sent the deficit money to all the bankers, since housing is not a particular goal of their/that agenda.

Her Majesty's CEO's are in fact now able to get on with their lives. The Socialists had actually done their job, until that bigoted woman showed up! Another fellow was taking long walks on the beaches, kicking about the new little tarballs in the sand, guaging the amount of fuse, petrol and matches needed: To continue along, what Abraham Lincoln had started further inland, some few decades, ago.

"Crow, James Crow: Shaken, Not Stirred!"
(Ringo turned seventy, in the recent days, to the tune of, "All You Need Is Love:" That peculiar embrace where two only matter, and the rest of the planet can go to hell(?)! Other than Organized Religion, mainly the Music Industry prospers from that!)

 

[B. Kidd]

The Federal Reserve said yesterday that borrowing dropped by 9.1 billion in May, coming off a borrowing decline in April of 14.9 billion. The Fed had to revise their initial estimate for April that originally showed a 995 million dollar gain for that month.
Credit card borrowing has fallen for 20 straight months.
There are alot of sharp USMB members who post here.
And Topspin ain't one of them.