Credit Cards: Break Up, or Make Up?

[frank22]

http://online.wsj.com/article/SB1000142405...personalfinance

[frank22]

In fact, Dennis Moroney, research director, bankcards, for research firm TowerGroup, says more than 15% of credit-card accounts are expected to close in 2010, with more than half closed by issuers because of delinquencies, and the rest closed by card holders. In a typical year, account attrition is more like 10% to 12%, he says.

 

 

I am surprised that they only expect a attrition rate 3% higher than normal? You would expect a much bigger one this year due to the jackage, AF, CLDs. I would expect the forced closures alone to be much higher.

 

One reason may be we(at least I) don't know how many of the cardholders are being affected. We read it is millions, and I know many it has happened to, but many as a percentage of all out there it isn't as big as it seems?

[flacorps]

I think they're misunderestimating it (to use a Bushism) because it feeds on itself. CLDs lead to high utilization leads to Jackage leads to delinquency leads to closure. I expect acceleration, much as what happened with Advanta Bank--writ large.

[centex]

In fact, Dennis Moroney, research director, bankcards, for research firm TowerGroup, says more than 15% of credit-card accounts are expected to close in 2010, with more than half closed by issuers because of delinquencies, and the rest closed by card holders. In a typical year, account attrition is more like 10% to 12%, he says.

 

 

I am surprised that they only expect a attrition rate 3% higher than normal? You would expect a much bigger one this year due to the jackage, AF, CLDs. I would expect the forced closures alone to be much higher.

 

One reason may be we(at least I) don't know how many of the cardholders are being affected. We read it is millions, and I know many it has happened to, but many as a percentage of all out there it isn't as big as it seems?

 

The reality is that very few people could tell you what terms apply to their account. Think about how few bother to read and understand the terms before they even apply...and then of THAT number, how few actually bother to read notices about the account.

 

Then you ALSO have the subset that IS aware of the conditions but who PIF every month...if the card has no annual fee, I am paying FAR more attention to rewards and utilization than I am to APR (which DOES NOT affect me).

[LBCS]

I think they're misunderestimating it (to use a Bushism) because it feeds on itself. CLDs lead to high utilization leads to Jackage leads to delinquency leads to closure. I expect acceleration, much as what happened with Advanta Bank--writ large.

 

Luckily for all the credit card users your predictions have sucked so far.

[frank22]

I expect things to settle down soon. There will be looking hard for people in trouble and doing AA on them, and there will be more write offs. They will want customers and want them to use the card, and they won't mind a little risk.

 

I also suspect they will be lowering rates on many they jacked to 30%, or there will be many banks that will be happy to have you with rates in the 12-15% range. The very banks that raised your rates may open up a different account at a more reasonable rate. They really can't expect normal usage at 30% and really are in business to encourage you to use your card. If banks were shutting down credit they would not be sending out offers like they are.

 

This seems like common sense to me, but I admit my predictions have sucked so far too! No way to I see these rates coming! I am still thinking it has to be short term.

Edited November 4, 2009 by frank22

[flacorps]

I think they're misunderestimating it (to use a Bushism) because it feeds on itself. CLDs lead to high utilization leads to Jackage leads to delinquency leads to closure. I expect acceleration, much as what happened with Advanta Bank--writ large.

 

Luckily for all the credit card users your predictions have sucked so far.

 

Huh? What in here do I have to apologize for: http://creditboards.com/forums/index.php?showtopic=321571

 

I was ahead of the curve on the whole shootin' match.

[LBCS]

I think they're misunderestimating it (to use a Bushism) because it feeds on itself. CLDs lead to high utilization leads to Jackage leads to delinquency leads to closure. I expect acceleration, much as what happened with Advanta Bank--writ large.

 

Luckily for all the credit card users your predictions have sucked so far.

 

Huh? What in here do I have to apologize for: http://creditboards.com/forums/index.php?showtopic=321571

 

I was ahead of the curve on the whole shootin' match.

 

This is what I was referring to:

 

http://creditboards.com/forums/index.php?s...c=413270&hl=

[flacorps]

Those are largely somebody else's predictions. And I don't think they suck by any means.

 

We're going to be looking at one of those self-reinforcing spirals that George Soros says demonstrate reflexivity. And whether you like his politics or not, you can't argue with him having made a lot of money.

Edited November 5, 2009 by flacorps

[LBCS]

Those are largely somebody else's predictions. And I don't think they suck by any means.

 

We're going to be looking at one of those self-reinforcing spirals that George Soros says demonstrate reflexivity. And whether you like his politics or not, you can't argue with him having made a lot of money.

 

Buffett makes Soros look like a pauper - and Buffett says he is making a all in bet on the American economy. I believe Buffett. If you had purchased Goldman Sachs at the same time as Buffett you probably wouldnt be talking out of your hat about self reinforcing spirals.

[flacorps]

Goldman and Chase are both nests of cronyistic apparatchiks and they are both so overburdened with risk and universally reviled by the rest of the Street and indeed the rest of the country that I can't imagine them surviving--perhaps in the corporeal sense.

[LBCS]

Goldman and Chase are both nests of cronyistic apparatchiks and they are both so overburdened with risk and universally reviled by the rest of the Street and indeed the rest of the country that I can't imagine them surviving--perhaps in the corporeal sense.

 

Do you even understand what you are writing? Cut and Paste along with bad math can only take you so far. Sooner or later you are going to have to think for yourself and step out of delusionland.

[flacorps]

Glenn Beck hates Goldman. Since he is the new Marat, his hatred will likely have consequences.

[JerseyBaby]

Goldman and Chase are both nests of cronyistic apparatchiks and they are both so overburdened with risk and universally reviled by the rest of the Street and indeed the rest of the country that I can't imagine them surviving--perhaps in the corporeal sense.

 

Really? You actually believe neither Goldman nor Chase will survive?

 

Alrighty then...

[JerseyBaby]

Those are largely somebody else's predictions. And I don't think they suck by any means.

 

We're going to be looking at one of those self-reinforcing spirals that George Soros says demonstrate reflexivity. And whether you like his politics or not, you can't argue with him having made a lot of money.

Yes, he was an excellent trader and speculator who made a lot of money trading and speculating. But when it comes to economics and philosophy, he should have taken up bowling.

 

I do find irony in the fact you've chosen someone to reinforce you position, who, had he still been trading today, would have been one of your scapegoats.

[creditcardnoob]

15%? OKKKKKK. Just like the government does, they release false statistics to benefit them and then correct it (if at all) a few months later, with a released statement about how the numbers were "a little off". Just like how the stimulus plan is supposed to create jobs when there are serious flaws in the data. Many districts are reporting job gains of 100 when only 5 are created, and some have jobs reporting in districts that dont even EXIST

[Jen23514]

Glenn Beck hates Goldman.

 

I just hear the words glenn beck and automatically just assume the complete opposite is more accurate/true/better

[flacorps]

Glenn Beck hates Goldman.

 

I just hear the words glenn beck and automatically just assume the complete opposite is more accurate/true/better

 

Well the government is stuffed full of Goldman alums who pretty much have control of the Obama administration's response to the economic situation, and that situation seems to have worked out really, really, really well for Goldman. How has it worked out for the readers here?

 

I'm just askin'?

[Jen23514]

Glenn Beck hates Goldman.

 

I just hear the words glenn beck and automatically just assume the complete opposite is more accurate/true/better

 

Well the government is stuffed full of Goldman alums who pretty much have control of the Obama administration's response to the economic situation, and that situation seems to have worked out really, really, really well for Goldman. How has it worked out for the readers here?

 

I'm just askin'?

 

my life is no different now than 2 years ago with regards to CLs, personal income, or other financial factors.

 

I guess I'm lucky I'm not one of the 10% of people who are unemployed, but at the same time, what is going on now was set in motion LONG before current administration.

 

As for the Goldman connections, let's not forget Greenspan's connections to JP Morgan.

 

It's all connected, 6 degrees and all that.

 

Doesn't change my opinion on Glenn Beck, he's a whiny, , crying, mess of a man who hates anything that isn't white and good for the upper-class.

 

I support free speech, even when it makes me cringe, but that doesn't mean I have to like him or think he's anything but a sniveling moron.

Edited November 19, 2009 by Jen23514

[flacorps]

As for the Goldman connections, let's not forget Greenspan's connections to JP Morgan.

 

Jamie Dimon has Obama's ear, and consequently a hagiography in Newsweek a few weeks back. JPMorgan is another ticking time bomb full of risk, and along with the terminally sick Citi, all 3 are getting their debt downgraded by a somnolent-until-now Moody's.

 

Chickens are coming home to roost. DDR won't be pretty either.

[LBCS]

DDR won't be pretty either.

 

Dance Dance Revolution?

[Jen23514]

I'm just saying, no matter whose administration, the person in that position will have ties to the financial community that we can all find fault with. Scratching backs and all that jazz. Nothing to get your panties in a wad about, it's just the way it's done in Washington since the beginning.

 

but back to the topic at hand:

With the rest of the Credit Card Act of 2009 taking effect next February and more regulations to come, card holders are likely to continue being affected by rate and fee changes. "We're not done yet," says John Ulzheimer, president of consumer education at Credit.com.

 

I agree, there is no way CC Companies are going to go out of the current regulation era quietly..... hold on to your plastic, it's going to be a bumpy ride

[flacorps]

I hate George Soros, but when he's right he's right.

 

I hope the Glenn Beck haters will adhere to the same principle, because Glenn seems to be right a lot lately.

[LBCS]

because Glenn seems to be right a lot lately.

 

Your credibility was pretty low with all your fuzzy math. But with that statement you managed to make it worse. Do you think anyone takes you seriously anymore?

[flacorps]

because Glenn seems to be right a lot lately.

 

Your credibility was pretty low with all your fuzzy math. But with that statement you managed to make it worse. Do you think anyone takes you seriously anymore?

 

 

Plenty of people take me seriously. Those that don't ... fail to do so at their peril.