January 30, 2008 |
Easy credit is great. Except when it's too easy. Millions of people are now in danger of losing their homes as a result of the meltdown in the sub-prime mortgage market. But millions more face the prospect of financial ruin because of an even more ubiquitous problem: the danger of making only minimum payments on monthly credit card bills. Michelle Schimeck, 35, discovered this for herself after running up a combined balance of more than $20,000 on five credit cards.
January 9, 2008 |
Consumer borrowing rose again in November as credit card debt shot up by the largest amount in six months. The Federal Reserve reported Tuesday that consumer borrowing climbed at an annual rate of 7.4% in November, far higher than the 1% rise in October. The category that includes credit card debt surged at an annual rate of 11.3%, a six-month high, an indication that shoppers were relying heavily on credit cards to finance purchases since home equity lines of credit became harder to get.
December 25, 2007 |
Americans are falling behind on their credit card payments at an alarming rate, sending delinquencies and defaults surging by double-digit percentages in the last year and prompting warnings of worse to come. An Associated Press analysis of financial data from the country's largest card issuers also found that the greatest rise was among accounts more than 90 days in arrears.
December 8, 2007 |
U.S. loans for big-ticket items like cars fell in October for a second consecutive month, according to a Federal Reserve report Friday that suggested tighter lending conditions in the wake of a global credit crunch. It was the first back-to-back decline for this type of loan since 1992. Nonrevolving credit, which includes closed-end loans for big-ticket items such as cars, boats, college educations and holidays, declined by $1.64 billion, or 1.26%, to $1.561 trillion, the Fed said.
November 14, 2007 |
Laurence Fink, who helped create the market for mortgage-backed securities, said the credit losses that had cost banks and securities firms $45 billion were about to get worse. Fink, chief executive of New York-based fund manager BlackRock Inc., said Tuesday at an investor conference that "many institutions don't understand what the credit crunch is going to do to earnings and their balance sheet." Financial stocks rallied Tuesday after Goldman Sachs Group Inc.
November 8, 2007 |
U.S. consumer borrowing in September rose the least in five months as Americans purchased fewer cars, boats, computers and other big-ticket items using nonrevolving credit. Consumer credit increased a less-than-forecast $3.7 billion for the month to $2.48 trillion, the Federal Reserve said. In August, credit rose $15.4 billion, 26% more than previously estimated. The report doesn't cover borrowing secured by real estate, such as home equity loans.
October 6, 2007 |
Consumers have boosted their borrowing at the fastest pace in three months, turning increasingly to their credit cards to replace home equity loans as a source of ready cash. The Federal Reserve reported that consumer credit rose at an annual rate of 5.9% in August, the biggest increase since May, when it jumped 7.9%.
September 27, 2007 |
Late payments on credit card bills slipped in the second quarter while delinquencies on home equity lines of credit climbed to a 5 1/2 -year high, painting a mixed picture of how people are managing their debt. The American Bankers Assn., in its quarterly survey of consumer loans, reported Wednesday that late payments on credit card bills dropped to 4.39% in the April-to-June quarter. That was down from 4.41% in the first quarter and was the lowest reading since the final quarter of 2005.
September 14, 2007 |
Even the maestro didn't see it coming. Former Federal Reserve Chairman Alan Greenspan has acknowledged that he failed to recognize early on that an explosion of sub-prime mortgages to people with questionable credit histories or low incomes could pose a danger to the economy. In an interview, Greenspan said he was aware of lending practices in which home buyers got very low initial rates only to see them jacked up later, causing payment shock in some cases.
September 11, 2007 |
U.S. consumer borrowing increased less in July than a month earlier as Americans took out fewer auto loans. Consumer credit increased $7.5 billion during the month to $2.46 trillion, the Federal Reserve said. In June, credit rose $11.9 billion, less than previously reported. The figures don't include mortgage debt. Auto sales slumped to a two-year low in July, capping the weakest quarter of consumer spending since the last three months of 2005.