Sunday, September 26, 2010

Credit Card Companies Are Looking for Business

PB Visa Gold Credit CardImage by liewcf via Flickr
I have noticed lately my mailbox has been a little fuller with advertising for credit cards. My old canceled credit card companies are sending me offers via Email. What's going on? Can someone tell Orchard Bank to leave me alone.
 
The new credit card rules are enforce now. Maybe their profits are going down a little and their looking for new business. Or maybe they really like me or they are looking to get back some old customers. Even my old friend CITI Bank sent me two new cards from my old accounts. They must like me again because last year they canceled all 4 of my cards. Now by magic two of my accounts have come back to life. I have even gotten new replacement cards from other card issuers, even though the card hasn't expired yet. I guess they want me to remember to use them. Somethings up, wonder what it is.

I saw over at NYTimes.com the reason why. A spokesman for Bank of America stated " We see deleveraging
 of the consumer" also adding that they see a more frugal consumer and a decreasing demand for credit. It seems we are losing our taste for the wonderful credit card. 

According to the BOA spokesman they are seeing a decline in loan balances of $37 billion dollars from a year earlier with $34 billion of that from the results of charge-offs. With a net decrease of $3 billion dollars in consumer debt balances. Whats the interest on $3 billion dollars. It's quite a bit of money they are losing because of us. With $34 billion in charge-offs  they are hurting a little bit.

Other credit card companies also are complaining that U.S. consumers are by and large deleveraging and are buying less and electing to use debit cards. The use of debit cards have increased greatly and really shot up at the beginning of the recession and is accelerating. I hope America has learned something from this recession and chooses to get out of debt.


1 comment:

  1. I have no great love for the credit card companies, and view the consumer deleveraging as a very positive sign. Wealth is not built off of debt and consumption. It is built off of saving, investing, and producing goods others want. Now if only the Feds and the states would show a little more fiscal responsibility.

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