The Next "Crisis"? Credit Card Debt - Page 2

Porsche-O-Phile · Porsche-O-Phile's Garage

Quote:

Originally Posted by HardDrive

We pay for everything with our card, and we pay it off every month. Alaska Airlines owes us a trip to Neptune at this point.

I keep being told that Uranus is more interesting...

Not that there's anything wrong with that.

FWIW I'd pick Neptune too.

kstar · 10-19-2008, 11:11 PM

Quote:

Originally Posted by djmcmath

Funny, it was just about a month ago, I started asking this question. When will the "credit crisis" reach the credit card companies? The oddity, of course, is that despite the obvious lack of credit, I'm still getting 3 letters a day from CC companies who want to loan me money. Funny.

Anyway, if the bombshell is going to hit in January '09, should I short the CC companies? AmEx? Discover? Who's going to be the Epic Fail in this one?

Dan

CapOne, according to the article of the OP.

They did dump their sub-prime mortgage business last year and they did just have a profitable quarter, FWIW.

Looks like their stock (COF) is holding up so far and about $9 above the 52 week low. Maybe this is a good short, but I have not studied their fundamentals.

Best,

onewhippedpuppy · 10-20-2008, 11:32 AM

I'd like to believe that the silver lining of the credit crunch will be Americans returning to the cash-based spending of their grandparents, and credit becoming more difficult to acquire. Unfortunately the govt seems hell-bent on bailing out those who acted irresponsibly, increasing the chances of them repeating their mistakes. The best lessons in life are learned the hard way.

Of course, what the hell do I know? I have a 20 year fixed mortgage and haven't ever carried a balance on my wife and I's one (yes one) credit card. Now, who do I call to get a bailout on my student loan?

the · 10-20-2008, 11:35 AM

I'm sure John McCain will say it's better for you and our economy if your neighbor doesn't get sued for not paying their credit card debt, so the govt should pay it for them.

onewhippedpuppy · 10-20-2008, 11:37 AM

Quote:

Originally Posted by the

I'm sure John McCain will say it's better for you and our economy if your neighbor doesn't get sued for not paying their credit card debt, so the govt should pay it for them.

I could retort, but that would get this thread sent to the litterbox.

onewhippedpuppy · 10-20-2008, 11:38 AM

Quote:

Originally Posted by Porsche-O-Phile

I keep being told that Uranus is more interesting...

Dude? Dude.......

legion · 10-21-2008, 05:18 AM

I remember thinking that the feces would hit the fan during the recession after 9/11.

But it didn't.

I still had friends in Naperville at the time and though people had lost jobs or income, they kept their spending the same. Some people really increased their spending just to show off. (I remember a friend threw an "exotic animal party" for his one-year-old--he and his wife were unemployed at the time.) This really amazed me.

Some people refinanced their homes and pulled out equity. Some people started to accumulate credit card debt. A lot of people did both. I imagine this was not unique to that one town.

As RE prices rose rapidly, people felt they had the money to spend (the "wealth effect") and figured they could just refinance to pay off their CC debt at any time. People got very accustomed to spending well above their earnings and making up the difference with asset appreciation.

Well, we all know what has happened since.

And those people who refinanced every 2 years for the past 7 and pulled out equity are finding themselves upside-down on their mortgage. It's pretty easy to walk away from a house when it no longer prints money for you AND you find yourself owing more than it is worth.

jyl · jyl's Garage

I don't know much about the credit card offers that come in the mail. We simply tear them up and throw them away.

When you receive lots of such offers, does it mean that the card issuer actually intends to extend credit to you (i.e. they have your credit info and want to issue you a card)? Or does it merely mean they are prospecting for leads (i.e. they just want to see your application, to see if you look like a desirable cardholder)?

If the latter, it might simply mean they are having trouble finding enough qualified applicants and are being forced to market more heavily, by sending out more "offers" which are really just advertisements. They might not necessarily be trying to extend more credit at all.

KFC911 · 10-21-2008, 06:09 AM

One great benefit of "freezing my credit" through the three agencies some time back is now I don't get half-dozen CC offers every week. I've never paid a cent in CC interest over the years, but they sure kept trying

.

onewhippedpuppy · 10-21-2008, 07:56 AM

Quote:

Originally Posted by jyl

I don't know much about the credit card offers that come in the mail. We simply tear them up and throw them away.

When you receive lots of such offers, does it mean that the card issuer actually intends to extend credit to you (i.e. they have your credit info and want to issue you a card)? Or does it merely mean they are prospecting for leads (i.e. they just want to see your application, to see if you look like a desirable cardholder)?

If the latter, it might simply mean they are having trouble finding enough qualified applicants and are being forced to market more heavily, by sending out more "offers" which are really just advertisements. They might not necessarily be trying to extend more credit at all.

Some of mine say "you're approved" on the outside, so I guess they want me as a customer? The envelope is all I ever see, just like you I tear them in half and trash them.

kstar · 10-21-2008, 08:05 AM

Quote:

Originally Posted by onewhippedpuppy

Some of mine say "you're approved" on the outside, so I guess they want me as a customer? The envelope is all I ever see, just like you I tear them in half and trash them.

While you most certainly may qualify for the offers you receive, I suspect the "You're Approved!" printed on millions of envelopes is followed by lots of "small print".