Consumer credit crisis: No sign of decline

The credit problem will get worst as long as the credit card companies continue to charge late fees If I can not make a scheduled payment what makes you think I can pay late fees.
I tried to work with my credit card company and the only solution they had was to close my account by grantor which is a negative on my credit report is this just for meanest or do they really not care if people are making an effort to pay

Michael Strella, I agree with most of your premises, however, my husband and I are already teaching our teens how to postpone gratification until they can pay cash for it. Since they were in elementary school, they have been taught the difference between a need and a want and that Mom and Dad would provide for their needs, they needed to save for their wants. This is what we all need to learn or re-learn.

yes, i agree with jane carpenter.
CHASE also closed all of my three accounts,which i always pay balance in full and never pay late in all my account and with every credit card company.
they said reason is i have to much balance and too much credit.
so,tell me what credit card for?
…i spend credit in business which i get return in profit and as long as i can pay back.
isn't that how people here make money and how u.s. business have grown?… what a dump company ?

If we are lucky we will devolve bachwards to the 50's and 60's yearning for simpler times when respect for our neighbor was shared by many. We are going to have to change by rejecting consumption and greed for there own sake.
The middle class is disappearing and the upper class has gotten bigger in absolute numbers but with a growing and astounding concentration of wealth in the highest 5% of households.
Credit will never be as loose as it was before the meltdown. Now the Banks are still so weighted down by toxic mortgages that cannot be valued; they are hoarding cash and not lending even when its right to lend to small business, the engine for creating jobs and real distribution of wealth to the middle class. They may be right in not lending to the next group of high probability defaulters that are falling from the ranks of 600-700 credit scores with no job. They are wrong in not lending to businesses with a good plan and a good track record. That is why the unemployment rate will move higher into double digits as the entire system stalmates and cancels out without a solution. The solution will only come from a change of values from consumption and greed to conservation and moderation of wants over the long term. The banks are scared because they nearly melted down. They realize that all their new reported profits would be eclipsed by losses if they continue to feed consumers' wants. However the deflation of the bubble in our heads will take a long time probably more than one generation until the belief systems are turned around. The entire housing bubble will not be deflated until, banks, the consumer and government comes to its senses. Until the middle class has jobs and can afford the homes they live in we are in for a downward spiral.

As far as I have seen, the credit card companies may be creating their own crisis. I have never been late with a payment but now my credit card comapny, Chase, has decided to more than double my minimum payment on a low fixed rate advance I have, which of course will make it that much more likely that I might be late or miss and then of course they can up the rate, etc. etc. They are the ones that made credit so easy for everyone but now they want to change the rules and turn the screws even if you have never before had a problem! It is really scandalous.

So Meg in MD using your logic we could say 20 years of Dems in the white house. 8 Clinton, 4 Carter, 6 Johnson, 2 Kennedy (not in a row). Personaly I feel the Federalist party is at fault current crisis, or it could be that both parties are equally worthless and until people start taking responsiblity for themselves and trying to blame others things will only get worse. Our first President warned us of problems that could arise from political parties due to people being loyal to the party instead of the nation. I guess we should have listened.

To everyone who thinks they can explain the housing crisis on a blog in a few lines: You are an ignorant fool. Purchase the book "The Housing Boom and Bust" by economist Thomas Sowell, and for only the purchase price of the book and the time to read it, you can buy your way out of your ignorance.

People, wake up! The Credit Card Reform Bill has caused all this. Now the banks are hurrying to raise everything thing they can while it is still legal. Obama should have made the Bill retro, HELLO!!!! The banks need to work with consumers, not punish them.

I agree Trans-union is pathetic!

"Republicans have been running the government and and running up the national debt for all their talk of not wanting to spend money. You seem to also forget that in it was the Republicans who refused to let Clinton push through a balanced budget. I remember very clearly DC being shut down for a month or so because Republicans wanted to spend more money then the country brought in."

First, the national debt has never been "0" during that time frame. Therefore a balanced budget has been an "accounting gimmick" and the budget never really been balanced.

Second, the current budget deficit is going to clock in at 2 trillion this year. 4 times what it was last year. The Nationl debt is now almost equal to the total of the entire GDP of the U.S. Looks like we are going to make up for that reckless spending we did in those last 20 years combined in 12 months.

Third, the biggest difference here is that we have increased spending while tax receipts are decreasing. Now we are thinking of spending even more. This is a recipe for disaster. Our Government currently have us on a train with no brakes headed for a brick wall with no way to stop it.

Buy Gold and bullets. Because your going to need both.

Can the peanut gallery stop questioning the math. It only shows how bad educaion is in this world where people cant figure out the concept of an index which is nothing but a base line to measure above the norm or below the norm. Or if you dough boys have any retail experince, the number went from 100 to 127. Which means it went up 27 basis points above the norm of 100. We analysts or demographers call them index values. Look up the word index if any of you have a dictionary. As for the credit scoring agencies the FICO score is the most elaborate idiotic model ever created. You get punished for using credit and get punished for not using credit. You get punished for charging your card fully paying it off right away and still get punished for using your entire credit limit even though you payed it off. This is nothing but a way for the fat cats to make more money off of you, charge higher interest and fees. As for the high risk states, yes immigration plays a big role, much of the immigration does not understand modern finance and laminated loan sharking, so it doesnt surprise me.

Katherine, do you work for Congress?

The problem with credit stems 100% from people that spend more than they make. If everyone lived within their means (no need to live below your means, just stay within them) credit crises and asset bubbles wouldn't happen.

Your argument that jobs is one of the major determining factors for the credit risk doesn't make sense. I know for a fact that two of the states with the highest risk (Texas and Louisiana) have lower unemployment, comparatively speaking. Maybe you should reevaluate your reasoning.

This crisis all goes back to the repeal of the Glass-Steagall Act of 1933. The repeal (Gramm-Leach-Bliley Act of 1999) was lead by the Republicans to deregulate the banking industry. Hence the beginning of sub-prime mortgages etc.

You agreed to the terms of the credit card when you decides to use it. Why get mad at them if you are the irresponsible one? You know when the bill is coming each month….so why be late with your payment? If someone borrowed money from me and agreed to pay me back at a certain time and then didn't…..I would want to be compensated extra as well.

Bottom line….don't spend more than you make!!!

While all the demographers and sociologist try to analyze the results in terms of unemployment, super bowl effect, etc., etc, I guess it is probably politically incorrect to say that what the worst states have in common is a high minority and immigrant population, while what the best states have in common is a very low minority and immigrant population. In spite of what Independent Voter spews forth below, it was Barney Frank and his ilk that pushed lowering lending standards that allowed this situation to occur. The Republicans were warning against it years ago.

I never said 20 years in a row. Learn to read Mark in Roseburg, OR. Bush Jr. 8 yrs., Clinton 8 yrs, Bush Sr. 4 yrs, and Reagen 8 yrs. So if we do the math 20 out of 28 years Republicans have been running the government and and running up the national debt for all their talk of not wanting to spend money. You seem to also forget that in it was the Republicans who refused to let Clinton push through a balanced budget. I remember very clearly DC being shut down for a month or so because Republicans wanted to spend more money then the country brought in.

20 years of republicans in the white house?? Bush only served 2 terms, not 5. that Clinton guy was in before that. This credit thing is easy to fix, IF YOU DON'T HAVE THE MONEY DON'T SPEND IT!! and remember Don't spend money until it is in your hand or in the bank or you will spend it more that once. The economy was a farce because it was being fueled by borrowed money, now it is time to pay the piper.

I just emptied 1/3 of my savings to pay off my credit card in full. Got tired of making payments every month (payed early and always triple the minimum payment) and the bill just never went down.

dr funk,
27% of 100 is 27. The figure went from 100 to 127 so that is a 27% rise.

Here is the appropriate consumer revolt:

Cut up the cards. Pay them off. Stop borrowing.

Refusing to pay the cards for a month is not a revolt. It is just trying to get something for nothing. It is just not fulfilling your obligations.

Too much indebtedness coupled with an amazing attitude that credit is a right and doesn't really need to be repaid, is a major reason why defaults are on the uptic.

STOP BORROWING people.

Katherine – if you want to revolt, use credit wisely or don't use it at all. Credit isn't a right granted to you or guaranteed to you, it is a tool for you to use and placed out there for companies to make money. Don't fool yourself or blame others when the rates are out of control.

I have a Chase card that is over 27% interest and several other that are under 10% interest. I use the 27% card as it pays me miles every month. How much interest have I paid to them over the last 10 years $0, but have earned over 300,000 miles. I don't charge if I don't have the cash and it is not a tool for me pay things when I don't have a job.

Use the credit and you should be prepared for the consequences and the terms that go along with it. If you don't like the consequences don't use it even if it is made available to you.

TransUnion is the worst of the three credit agencies. Nothing they have in their data base is correct. They have me with a note to Ford credit. Never bought a Ford. Have been trying to get it removed for over 8 months. Any information they have on credit risk can't possibly be accurate.

Barney Frank, the Dem congressman from MA, said in an interview by J Stewart (Daily Show) that the Repubs did not want to subsidize rent for poorer individuals, so preferred to put them into mortgages they could not afford, in the name of "home ownership". Secondarily, the Repubs also failed to regulate the resulting mortgage securitization madness. While the Dems across the aisle deserve some of the credit, it is indeed primarily a Republican mess. Wow. I never thought I'd experience these times.

It just goes to prove what 20 years of Republicans in the White House has shown, a very large amount of Republicans can't manage money. Bush spent 10 trillion while in office, now they are complaining that Obama needs to spend 1 trillion to clean up Bush's mess, please. Signed an independent voter.

Is your math right? Does 27% of 127 = 27?

I don't see how you can make a linkage between consumer debt and the unemployment figures. Three of the worst states (TX, LA, & MS) have unemployment rates less than the national average. The reason might be more fundamental, those states' emphasis on education.

So why do they charge userous late fees and raise rates on struggling payees? That makes sense…You are late on a payment …so i'LL CHARGE A 33% LATE FEE AND RAISE YOUR INTERST RATE!! So next month it will be harder to pay! I hope there is a collective revolt…What if we ALL didn't pay one month our payments?