Does anyone else think credit card default rates are going to surge

[Skwmom]

much more than expected? I think the greedy idiots are overlooking the impact that their disgusting behavior will have on credit card holders.

The banking crooks count on people paying the increased interest rates, fees, etc. because of the stigma attached to bankruptcy and because many people believe that whatever it takes, they have to pay their bills (e.g., by getting a second job). But when people see the crooks raiding the U.S. Treasury and getting huge taxpayer funded bonuses, I think more and more people are going to look at bankruptcy as an acceptable alternative. It's not going to carry the "stigma" that it did in the past.

I think chances are good that we are going to see a "Take this card and shove it, I ain't paying you no more" movement. Americans are getting fed up.

[villager]

1. it would be vastly overdue....

n/t

[dkf]

2. After reading about that Detroit Mayoral candidate walking away from his house

I'm inclined to believe you.

Then many people will wreck their credit and no more credit cards for them. Everyone will live on a cash basis. Good!

[vaberella]

16. Student loans will NEVER allow that. n/t

[Skwmom]

17. Here's something on student loans in bankruptcy.

I don't know if it's current or not.

http://www.studentloanborrowerassistance.org/bankruptcy/

It provides some good examples of when student loans were discharged.

[vaberella]

18. Huh...understood. It just won't work in my case.

My mum is also co-signed. If I can't pay they'll get her and I can't let that happen. So I'll just deal with it.

[DrToast]

3. What is expected?

[Skwmom]

6. In preparing their quarterly reports the credit card companies

estimate credit card defaults. But I think these estimates (whatever percentage they are) will be far short of the actual default rates because I don't think the greedy jerks are factoring the impact that their egregious actions will have on credit card holders.

[DrToast]

10. Yes, but what is expected?

You asked if anyone thought that things would be worse than expected. But how can we answer that without knowing what they're currently forecasting!

[Skwmom]

12. I'm saying that I think the estimates made by the credit card companies

(whatever the estimated percentages are) will be low b/c they aren't considering the fed up American factor (which I think is going to end up being a big factor in default rates).

[Skwmom]

7. Delete dupe.

[AndyA]

4. I think the credit card companies actions in this regard prove they aren't capable of running

a profitable business.

You don't raise fees and interest rates on people who are already just barely making it. While someone might be able to accept paying interest on balances when it's 7.9%, they won't be paying any principal down when rates go to 24.9%.

People also will forgo putting purchases on credit cards due to the higher interest rates, especially if it would take a few months to pay off. This will deprive the credit card companies of their fees to merchants as well as keeping the economy slow because consumers aren't spending.

It's easy for me to see why these companies got in such bad shape, with decisions like these you've got a lot to overcome to get to the profitable side of the scenario.

[Skwmom]

14. Also, whatever credit card company decided NOT to screw their

card holders today would reap the benefit in the long run. Heck, if I ran a credit card company I'd already be rolling out the ad campaign (something along the lines of we will not take advantage of our customers during these difficult times, we are all in this together........and of course listing all of the egregious acts of my competitors - without naming them of course. :)

[Kurt_and_Hunter]

5. Bank of America seems to think so

http://www.calculatedriskblog.com/2009/04/bofa-ceo-credit-is-bad-going-to-get.html

[Skwmom]

9. No. I still don't think that they've factored in the "fed-up American" factor.

[SoCalDem]

8. Of course they will skyrocket.. and the "pre-emptive" bankruptcy laws

will not work "as planned".. The plan was to tie the credit card debt to people's paychecks and homes, so they would be afraid to not pay and then try to file bankruptcy, but even in the beginning months of the new laws, lawyers were finding that people were in such bad shape, that most would not even benefit from the mandatory counseling and repayment plan parts of the new laws..

Here in CA, most of the mandatory "meetings" were spent on small talk, before approving the people for Chapter7, since their debt-to-income ratio was so "out there".

and now....

we have people who HAVE no job, and who have already lost or are near losing the house, so does anyone really think they will be able to , or even plan to repay all that credit card debt they have been hauling around for decades?

Many people have been using credit cards INSTEAD of the raises they should have been getting all along...for a very long time, and all it takes is for one major event to derail their monetary lives..

FEAR of losing their house prevented many people from filing bankruptcy, but once that house is gone or about to go, bankruptcy is no biggie..

Filing bankruptcy and walking away from credit card debt may actually be the last step they take toward getting their financial houses in order again.

[Skwmom]

11. I love how the crooks are trying to sucker people into taking

out new low interest credit card advances. Of course, if inflation hits (likely, if we keep printing money), they will make out like gangsters when the low teaser rate period expires and people are paying prime + on their credit cards (which, wouldn't you know most credit cards have switched to).

[salguine]

13. It'd be interesting to see what they would do if everyone in America

didn't use their credit cards for a week.

[Skwmom]

15. Great idea!

[cwcwmack]

19. it's unbelievable...

that a 29.99% interest rate is legal...

THIS is a big issue for me and an issue I'd like to see attacked.

[Skwmom]

20. Well, if inflation kicks in with most card rates now the prime rate plus so many

percentage points, I think 29.99% will look like a bargain in the future. Isn't that sad.