Credit cards can aggravate world crisis
4 November 2008The market of credit cards has heavy times that can create a new coil of world crisis. According to data US FRS now intimidated by prospect of approach of economic recession Americans are having about 950 billion dollars of “a plastic debt”.
According to experts, the situation in sphere of card crediting reminds a vicious circle: in view of growth of volume of non-payments the interest overdraft rate increases, that finally again turns around growth of non-payments.
According to Moody’s, the share of transient card credits has increased from 4,61 % up to 6,82 %, i.e. growth has made 48 %. In case of growth of unemployment, write-off on credit cards can get really historical scales.
It will, first of all, affect such banks, as JP Morgan Chase, Bank of America and Citigroup, which, according to Nilson’s report, have issued the greatest quantity of credit cards.
It is necessary to note, that, according to the American legislation, citizens, facing problems with debts, can have possibility can apply for personal bankruptcy, and at performance of all necessary conditions they will receive chance, that in five years all their debts will be cancelled. For example, the citizen it is obliged to return only 10 % of debts and 90 % of debts will remain as creditor’s loss.
- Americans do not use credit cards
- The British bank has withdrawn 160 thousand credit cards
- Goldman Sachs: world credit crisis will manage in $1,2 billion
- Mortgage crisis in the USA knocks Russia (Part 1)
