[Iria]

The troubles sound familiar:

Borrowers falling behind on their payments. Defaults rising. Huge swaths of loans souring. Investors getting burned.

But forget the now-familiar tales of mortgages gone bad. The next horror for beaten-down financial company is the $950 billion worth of outstanding credit card debt -- much of it toxic.
___________
Source: MSN Money

[Judas]

yeah i was wondering when people were going to start taking a look at the credit cards.....

insane amounts oweoing on plastic

[CDsDontBurn]

i have only two credit cards with balances currently. one is nearly paid off, and the other has a while to go. but, hopefully, i will have the smaller one paid off in a month or two, and my larger one paid off in about 6 months at most .

[dj_stick]

i only have one credit card, not much on it (but then i don't really like the idea of buying stuff on credit unless I a: need it and b: can pay it off with in a month or two

[Vikingod]

They come in handy when you have a family, but people do abuse them.

Honestly though, the credit card fallout could be bad. That and automobile loans.

[[hobo]eclipse]

so...it's basically all "financing", specifically on a consumer level?

[CDsDontBurn]

Originally Posted by [hobo]eclipse

so...it's basically all "financing", specifically on a consumer level?

if you think about it, we all are consumers on one level or another...

[ferret2004]

We're in the middle of a financial crisis, and retail stores still continue to push their own branded, high interest credit cards to customers, especially the ones who can't afford it.

[CDsDontBurn]

i tear up all credit card offers i get now. i already have enough of them, and there's no need for more of them either.

[Falstaff]

I have one card with a 50,000 pound limit and 4 percent interest and I always pay my balance down immediately, and I dont use debit cards either. I dont even use chip and pin. I keep 300 pounds in my wallet and 300 dollars in case I need it.
Credit is the whole bloody problem, and unfortunately futures speculation as well.
All the banks need to get alot tougher on granting access to credit.
Most people get upside down at least once in their life if they are not careful.

[Fr4nk3nst41n]

we are reaching the breaking point.
most of the people i attent to, is in debt and already behind a few months and trying to yet another loan.(that will NOT happen-by my bank standarts-)

[Falstaff]

The french banks are pretty tough, but UK and American banks and credit organizations are pretty sloppy. (or were)

[thunderclap]

It was one of the hardest (yet smartest) things I ever did: cut up the credit card. You come to rely on it when in fact you don't. I had a balance several years ago of about $12,000 and it's now down to about $3500. That probably ever would have happened if I hadn't cut up the card. I now have one for immediate needs (gas or food, basically) that is paid off within the month.

[Vikingod]

Originally Posted by Falstaff

The french banks are pretty tough, but UK and American banks and credit organizations are pretty sloppy. (or were)

You are right. You find the banking industry is cyclical. This same thing happened in the early 90's, it just wasn't on such a grand scale (but it was very bad). Banks tend to follow trends where risk management is only important after the floor falls out from under them. Then they button up for a bit until things calm down, then they forget what happened before. It's really a 12-15 year cycle.

The US government tends to act the same way regulation-wise. Over time, the republicans tend to relax regulation too much which creates the current problems then the boys in blue step in and tighten things down. Then they go overboard and the cycle repeats itself.

[Judas]

i try to pack as much onto my credit cards.. and pay it off in one full sweep at the end of the month.... 0% interest paid..... credit score gets a major boost.

but as of late i've been a little bit more diligent.

I wish i had some credit history i still can't get a loan.. and i got lucky to get a credit card at all. (only got it a year ago roughly)

[Stop It]

Originally Posted by Iria

The troubles sound familiar:

Borrowers falling behind on their payments. Defaults rising. Huge swaths of loans souring. Investors getting burned.

But forget the now-familiar tales of mortgages gone bad. The next horror for beaten-down financial company is the $950 billion worth of outstanding credit card debt -- much of it toxic.
___________
Source: MSN Money

Shit, did you just say nearly a trillion $ is held as Credit Card debt in the US? Here in the UK our NATIONAL debt (Including lonads, Overdrafs and Mortgages, as well as CC debt) is £1 Trillion, most is Mortgage debt though.

What makes it worse is that CC debt is insecured, at least with the housing credit crisis there is something at the end of it, bricks and mortar, with CCs you have nothing, which means that in the US, you have a ticking time bomb on your hands.

The entire world economy, from a macro to micro level has been entirely based on credit, the problem is, nobody stopped to ask if the credit actually was viable, credit agencies looked at the wrong variable, liquidity, rather than the ability for an economy to cope with debt, that error has costed the economy big time.

On a more personal level, this will blow over, house prices will fall, more people will ACTUALLY be able to afford thier houses, commodity prices (Including credit) will fall because the money available to pay for them will be reduced, as will specualtion, thus profitiability will be restored to the markets as a whole.

The end result will be an "official" drop in GDP worldwide, yet trade will still physically grow, just at a price level that is paid for by actual money, not debt/credit based on futures, speculation and profiteering.

The age of the investment banker is over, long live the age of fiscal responsibility.

Of course, like stated above, this isn't new, will lessons be learned here or will we see the cycle hit us again? I hope for once that people gain a long term memory and stop this from happening again, alough I do fear that short term greed, like always, will take over and the moment we turn the corner of this crisis, we will sow the seeds of the next one.

[Zelig]

People are awful at managing credit cards...

I buy pretty much everything on my credit card and I've got it set up to automatically pay the balance in full from my savings account at the end of every month. My lifetime credit card fees of any sort total to $0, and I've got a nice pile of rewards points.