What a shame. For people who handle credit responsibly, new credit card regulations that went into effect Feb. 22 actually hurt more than help.
I’ll tell you why, and what we can do.
The new rules, part of the Credit Card Accountability, Responsibility and Disclosure Act passed by Congress last May, are intended to protect cardholders and end abusive industry practices.
For example, card payments must now be applied first to the highest-interest rate balance. "Double-cycle" billing, which results in higher interest charges, is no longer permitted.
Interest rate increases on existing balances are for the most part prohibited, as are rate increases on new purchases the first year on a new card. After the first year, card issuers must give 45-day notice before raising rates on new charges.
That’s all terrific, but it does nothing for financially prudent people who pay their balances in full each month. Instead, the law is prompting card issuers — who need to make a profit to be able to grant us credit — to raise other fees for everyone to make up for an estimated $12 billion in lost revenue.
In essence, "those who manage their credit well will end up paying for those who don’t," said Nessa Feddis, an American Bankers Association vice president.
To be fair, some new rules benefit everyone, including prohibiting fees for the way bills are paid (such as by telephone) and eliminating confusing cut-off times for receipt of payments. (For a rundown of the rules, check out the Federal Reserve’s website at www.federalreserve.gov/creditcard)
Still, by making it more difficult for card issuers to charge more to those who pose a higher risk of default — and defaults are running about 10 percent — the new rules lead to an inevitable result.
"Everybody is going to feel the higher cost," said Kenneth Clayton, a senior vice president for the bankers group. Examples include more annual or inactivity fees, fewer or reduced rewards programs and, for those who carry a balance, higher interest rates.
"We seem to be going from a marketplace in which a relatively few cardholders got into deep trouble to one in which the misery is more evenly spread," said Adam Jusko, founder of IndexCreditCards.com, a card information and comparison site.
Even those with outstanding credit are being affected. "I am livid," said a reader whose Citi card will start charging a $60 annual fee (more on that later). "I canceled it immediately," he said. "Here I am with an 800-plus credit score and this is how they treat me?"
That’s the way indeed. "The new law does not address or cap non-penalty fees like annual fees or inactivity fees, which may become more common for those who do not carry a balance," said Ben Woolsey, director of consumer research at CreditCards.com, another consumer-oriented website.
"Fees, fees and more fees" are an unintended consequence of the new rules, said Bill Hardekopf, CEO of LowCards.com, another card-comparison site. Bank of America, for example, added an annual fee of $29 to $99 on some accounts, and Fifth Third Bancorp imposed a $19 inactivity fee if a card is not used in a 12-month period. Citi will begin charging the $60 fee to some customers in April but will waive it if they charge at least $2,400 a year.
What to do? Comparison-shop for the best deals — there are still many — using the sites mentioned above. As Clayton of the ABA said, "no customer is a prisoner to their card," and a customer can switch to a better one.
For online payday loans no faxing or no fax quick instant cash loans turn to us.
The question is being raised more and more: Can Toyota recover its reputation?
There is no simple answer. The automaker once enjoyed exceptional renown. In addition to being the largest and most profitable auto company on the planet, Toyota was the most studied and copied. Its production system became a benchmark and a model for competitors to emulate around the world.
On top of that, Toyota (TM) was known for always putting the customer first, hence its passion for building cars with the highest quality and reliability. The automaker obsessively studied car buyers to find out what they wanted and then provided it for them. It became a leader in new vehicle segments like crossovers, and new technologies like gas-electric hybrids.
But when a crisis arose in the form of complaints about unintended acceleration, Toyota didn’t know what to do. Rather than make a forthright statement about the problem, its history, and its proposed solution, the automaker responded with obfuscation, delay, blame-shifting, and denial.
Not until last August, when a Lexus driven by an off-duty California highway patrolman rolled over and burst into flames, killing the driver and three members of his family, did the issue reach widespread public awareness. And when the time came to apportion responsibility for the incident and outline a new direction for the company, top Japanese executives were nowhere to be seen. When president Akio Toyoda first came forward to take responsibility and promise solutions, he seemed to do so with reluctance.
Compare that to the Tiger Woods scandal. Like Toyota, Woods had a reputation for excellence that far exceeded other golfers.
Like Toyota, Woods was widely emulated for his faultless behavior and superb sportsmanship.
Like Toyota, Woods initially put out a story about his wife, a golf club, and the shattered windows of his SUV that bore little relation to reality.
Like Toyota, the news about Woods’ missteps was allowed to trickle out day by day without being effectively refuted.
Like Toyota, Woods refused to make a public appearance to apologize for his misdeeds (and still hasn’t), preferring to issue press releases instead.
And like Toyota, Woods promised to mend his ways, without offering any convincing evidence of exactly how he will do that.
Just as Toyota has seen sales crumble and its used car values plummet, Woods has been abandoned by his corporate sponsors and shunned by other golfers business cards design.
Does this mean that Tiger and Toyota have seen their reputations permanently destroyed? Witnessed the domination of their respective enterprises ended? Are about to be permanently consigned to the ranks of the disgraced and the second-rate?
The betting here is that the answer to all three questions is "no."
Tiger Woods remains one of the best golfers in history, and assuming he can regain his form and start to win again, his fans will return.
The American public has a short memory, an inclination to forgive, and a willingness to extend second-chances. History is full of examples. After declaring he was leaving politics in 1962, Richard Nixon came back and was elected president in 1968. There have lately been reports that Eliot Spitzer, who resigned in disgrace as governor of New York two years ago, is considering a comeback of his own, thanks to an understanding electorate.
The same is true with Toyota, although the reasoning is more economic and less emotional.
American customers want to buys cars they like, and if they decide they still like Toyotas, they will continue to buy them. Ford (F, Fortune 500) was rattled by the Explorer-Firestone tire crisis in 2001, but it eventually recovered because the Explorer was a popular SUV.
Rehabilitation comes down to dollars and cents. If Toyota can convince shoppers that it still offers a strong value, then they will find their way to Toyota dealers.
The critical ingredient that is still missing from the rehabilitation of both Tiger and Toyota is that convincing personal apology. Tiger hasn’t been seen in public since the night of the accident and needs to make a believable account of his behavior along with a statement of his determination to change.
Likewise, Toyota president Akio Toyoda, as well as his management team, must make a complete explanation of their response to unintended acceleration and answer a comprehensive set of questions from outside experts. Only then will its slate be wiped clean, and Toyota will be free to begin the long process of rebuilding its reputation.
Kinder Morgan Energy Partners LP, one of the nation’s largest pipeline companies, agreed to buy four terminals from St. Louis-based Slay Industries for $98 million.
The assets include a river terminal in Sauget, a liquid bulk terminal and a warehousing distribution center in St. Louis and a terminal in Muscatine, Iowa.
The purchase gives Kinder Morgan a toehold in the St. Louis terminal market and "unparalleled access to major markets via rail and waterway," Jeff Armstrong, president of the company’s terminals business, said Wednesday in a statement.
Houston-based Kinder Morgan and Slay Industries also formed a joint venture at Slay’s Kellogg Dock coal terminal in Modoc, Ill., and new North Cahokia terminal in Sauget, which includes 175 acres for development.
Slay Industries was founded 90 years ago as Slay Motor Freight and generates annual revenue exceeding $125 million, according to the company’s website.
European exports declined for a second month in November as the euro’s strength made goods from the region more expensive abroad.
Exports from the euro area dropped a seasonally adjusted 0.4 percent from October, when they decreased 0.1 percent, the European Union’s statistics office in Luxembourg said today. The trade surplus narrowed to 3.9 billion euros ($5.6 billion) in November as imports rose 0.3 percent from October, when they fell 1 percent. European inflation accelerated to 0.9 percent in December, a separate report showed.
The euro’s 10 percent advance against the dollar in the past year is threatening to undermine the region’s recovery by making exports less competitive. While European services and manufacturing industries expanded at the fastest pace in more than two years in December, the economy still faces a “bumpy road” ahead, European Central Bank President Jean-Claude Trichet said yesterday.
“The exports-driven recovery of the preceding two quarters is fading,” said Dominique Barbet, an economist at BNP Paribas SA in Paris. “Imports’ lack of dynamism suggests lackluster domestic demand.”
December inflation was the fastest since February 2009, with energy prices rising 1.8 percent from a year earlier, the statistics office said. Core inflation, excluding volatile costs such as tobacco, food and energy, accelerated to 1.1 percent in December from 1 percent in the previous month.
Greece’s Struggles
The euro fell the most in almost a month against the dollar today as Greece’s struggles to cut its budget deficit dented investor confidence in European assets. The 16-nation currency traded at $1.4366 at 3:43 p.m. in London, down 0.9 percent on the day.
The ECB yesterday left its benchmark interest rate at a record low of 1 percent and signaled that officials will wait for more signs of recovery before withdrawing emergency measures further, with Trichet citing “a great level of uncertainty” surrounding the economic outlook short term personal loans. The central bank forecasts growth of about 0.8 percent this year and around 1.2 percent in 2011.
European Aeronautic, Defence & Space & Co., the parent of Airbus SAS, on Jan. 12 reported its steepest annual revenue drop since the company went public a decade ago, partly because of a weaker dollar. Eckhard Cordes, chief executive officer of Metro AG, Germany’s biggest retailer, said on Jan. 12 that he anticipates economic conditions will remain “challenging” in 2010 after currency swings eroded fourth-quarter revenue.
Biggest Economy
Economies around the globe are emerging from the worst recession in six decades, led by China, where exports gained for the first time in 14 months in December. The Asian nation overtook Germany as the largest exporter of goods in 2009. Industrial output in the U.S., the world’s biggest economy, rose in December for a sixth month, data showed today.
Euro-area exports to the U.S., the region’s second-biggest trading partner, dropped 20 percent in the first 10 months of 2009 from a year earlier, today’s report showed. Shipments to the U.K., the largest market for euro-area goods, declined 24 percent, while exports to China rose 1 percent. The detailed country data are published with a one-month lag.
To help shore up earnings, companies have been cutting costs and paring wages. European unemployment rose to 10 percent in November. That’s the highest in more than 11 years. Koenig & Bauer AG, the world’s third-biggest printing-press maker, said last month that it plans to eliminate more jobs.
“China and other emerging countries bring in volume but not necessarily profit,” Koenig & Bauer CEO Helge Hansen said on Dec. 4 in Wuerzburg, Germany. “They help retain jobs, but they don’t help in terms of a positive balance.”
Companies in the U.S. expanded in December at the fastest pace in almost four years, signaling the economic recovery is gaining speed heading into 2010.
The Institute for Supply Management-Chicago Inc. said today its barometer rose to 60, exceeding the most optimistic estimate of economists surveyed by Bloomberg News and the highest level since January 2006. The gauge, in which readings greater than 50 signal expansion, showed companies boosted production and employment as orders climbed.
Stimulus programs and discounting have propelled a rebound in global sales that is reducing stockpiles, which may spur manufacturers to further increase production in coming months. Caterpillar Inc. is among companies that may recall dismissed staff, pointing to gains in employment that will drive consumer spending, which accounts for 70 percent of the economy.
“Manufacturing is now moving into recovery,” said David Sloan, senior economist at 4Cast Inc. in New York, whose estimate was the highest among economists surveyed. “Inventories are rebuilding and exports are looking strong, with the Asian economies looking firmer and the dollar weak.”
Stocks drifted between gains and losses. The Standard & Poor’s 500 Index was little changed to close at 1,126.42.
Exceeds Estimates
Economists projected the Chicago index would drop to 55.1 from 56.1 in November, based on the median estimate of 53 projections in the Bloomberg survey. Forecasts ranged from 52 to 58.5.
The group’s gauge of orders climbed to the highest level in more than two years and its measure of employment showed growth for the first time since November 2007, the month before the recession began. Indexes of production and order backlogs also improved.
Caterpillar, the world’s largest maker of bulldozers and excavators, will bring back some laid-off workers next year as sales improve, said Chief Executive Officer Jim Owens.
“We’ll gradually begin to call people back and to rebuild our overall sales and ability to ship product,” Owens said in a Dec. 11 interview with Bloomberg Television. “I think it will gradually begin to pick up as 2010 unfolds.”
Caterpillar cut about 18,700 full-time jobs and about the same number of temporary workers since December 2008 as the global recession reduced demand. The Peoria, Illinois-based company predicts 2010 sales will increase as much as 25 percent from the midpoint of the 2009 forecast range.
Early Indicator
Economists watch the Chicago index for an early reading on the outlook for overall U.S. manufacturing, which makes up about 12 percent of the economy. The group has said their membership includes both manufacturers and service providers, making the gauge a measure of overall growth.
The Tempe, Arizona-based Institute for Supply Management’s factory index probably rose this month to 54 from 53.6 in November, according to a survey median. That report is due Jan. 4.
The world’s largest economy expanded at a 2.2 percent pace from July through September after a yearlong contraction that was the worst since the 1930s, figures from the Commerce Department showed last week. Economists surveyed by Bloomberg forecast growth to pick up to a 3 percent pace in the fourth quarter and average 2.6 percent for all of 2010.
Exports rose for the sixth month in October as economies worldwide rebounded from the global economic slump. A 13 percent drop in the dollar since March 5 against a basket of six major currencies also making American goods more competitive to overseas buyers.
Inventories Increase
Inventories at U.S. companies rose in October for the first time in more than a year, the government said Dec. 11, a sign firms are boosting production in line with rising sales.
United Parcel Service Inc. Chief Executive Officer Scott Davis said Dec. 2 that shipping demand was starting to improve as companies rebuild inventory and consumers began holiday shopping. UPS, the world’s largest package-delivery company, is considered a bellwether for the economy because it handles goods ranging from auto parts to electronics to clothing.
“Inventory has gotten real low,” Davis said in a Bloomberg Television interview. “We think there will be some replenishment of inventories going forward, so the outlook is much better.”
– With assistance from Will Daley in Chicago and Betty Liu in New York. Editors: Carlos Torres, Vince Golle
India must loosen foreign investment rules in insurance, banking and retail to create more jobs and accelerate economic growth, the Organization for Economic Cooperation and Development said.
The South Asian nation’s policies to attract overseas investors remain “restrictive in comparison with a majority of OECD countries,” the Paris-based organization said in a report titled “OECD Investment Policy Reviews: India.”
India limits New York Life Insurance Co. and other foreign insurers to a 26 percent stake in local companies and bars retailers including Wal-Mart Stores Inc. from opening outlets in the world’s second-most populous country. The OECD called for an improvement in the “investment environment” in India, which the World Bank places 133rd among 183 countries in a ranking based on the ease of doing business.
Indian Prime Minister Manmohan Singh told investors in New Delhi last month that the country had received foreign direct investment of $121 billion since 2001 and that it isn’t a “large number given the scale of our economy.” The flows were less than a quarter of the $566 billion that China attracted during the period.
“India may be able to better achieve its objectives through non-discriminatory policies rather than sectoral restrictions on foreign investment,” OECD Secretary-General Angel Gurria said in the report.
A plan to raise the foreign-direct-investment ceiling in insurance to 49 percent has been stuck in parliament for more than three years and is currently being debated by a group of all political parties.
Bank Access
In retail, local laws are aimed at protecting small shops in Asia’s third-largest economy. India permits overseas chains such as Wal-Mart to operate as wholesalers and sell groceries and other goods to businesses such as supermarkets, department stores and restaurants payday loans. They are barred them from opening stores or buying stakes in supermarket chains.
In banking, India’s central bank postponed in April a plan to review granting greater access for foreign lenders into the economy. The Reserve Bank of India regulates the entry of foreign banks and even limits expansion of their branches to 12 a year, the OECD said.
“Growth could be accelerated by the enhanced productivity from increased foreign investment,” the report said. “In banking, insurance and especially retail distribution, the influx of FDI could help raise incomes in the agriculture sector while increasing the choice and lowering living costs.”
Economic Growth
The OECD said that while growth and investment in India has been “impressive” since 1991, when Prime Minister Singh as finance minister opened the nation’s economy to foreign investors, income inequalities among states have increased.
India’s economic growth has averaged 8.5 percent each year since 2004 after expanding at a 6 percent pace during the 1990s. India’s investment rate has more than doubled to 35 percent of gross domestic product since 1991.
The OECD called upon poorer states in India to cut bureaucracy to attract more investment and spur growth.
“While the central government has reduced the number of approvals needed for new investment, there remains a need to streamline administrative procedures at the state level,” according to the report.
The OECD also called on India to improve the judiciary, whose capacity to handle cases such as those related to intellectual property rights “in a timely manner remains insufficient.”
OTTAWA–Canadians are becoming more pessimistic over the strength of the economic recovery and what it will mean for their finances and job security, a new consumer confidence survey shows.
The monthly Conference Board of Canada survey shows even as economists say they think the recession has ended, many Canadians are not so sure.
Consumer confidence normally bubbles during good times, but the November survey of 2,000 people finds that confidence dropped 5.7 points to 79, well below the readings of about 100 observed before the recession struck a year ago.
The biggest worry is over job security, not a surprising finding given that more than 400,000 workers have lost jobs in the past year, including 43,000 in October, the last month for which data is available.
The November survey found only 19.7 per cent of the respondents expected to find more jobs available over the next six months, down 3.2 points from October. As well, 25 per cent said they believe fewer jobs will be on offer, up 1.2 points.
"The outlook for future job creation remains a significant detractor to consumer confidence," the Ottawa-based think-tank said.
"This month’s results highlight just how fragile the perception of an economic recovery is at this time."
Economists are divided on the importance of consumer confidence surveys as an accurate predictor of future economic performance, with some saying the results merely serve to reflect current sentiments. But the board and some economists argue deteriorating confidence can cause individuals to hold off purchases, thereby depressing overall economic activity easy payday loans.
The latest survey does suggest that the euphoria over the end of the recession observed during the spring and summer months is giving way to a belief that true recovery, as many analysts have warned, may take years rather than months.
Gloom was spread throughout the country, with Ontario, British Columbia and Atlantic Canada registering declines in consumer confidence. B.C.’s decline was 13 points.
There were no corresponding bright spots. The other two regions – Quebec and the Prairies – registered no relevant change from the rather weak optimism of the previous month.
The survey also found more pessimism about personal finances.
Just 13.9 per cent of respondents answered positively about their current finances, down one point from October.
Asked if they thought their family’s finances would improve in the coming six months, only 27.1 per cent agreed, down 0.6 of a point.
And 25.6 per cent described their finances as worse than six months ago. Not surprisingly, their views on whether this was a good time for a major purchase fell – not a good sign for retailers during the year’s busiest shopping season.
The Canadian Press
The number of people shopping on Black Friday is expected to pick up more than 16% this year, according to a survey released Tuesday.
A staggering 57 million people said they would "definitely" head to stores on the day after Thanksgiving, up from 49 million in 2008, according to a survey by the National Retail Federation.
An additional 77 million said they would wait to decide after seeing the weekend deals.
And they could be persuaded, according to NRF president Tracy Mullin.
"Regardless of what we’ve already seen these last few weeks in terms of promotions, retailers still have a few tricks up their sleeves to excite Black Friday shoppers," Mullin said in a statement. "Americans can expect huge sales on popular items like toys, electronics and apparel."
Overall, up to 134 million people said they will shop on the Friday, Saturday or Sunday following Thanksgiving, up 6% from 128 million people the previous year.
The survey said 66.3% of consumers said they will head to department stores and 62.4% to big box stores on the day that kicks off the holiday shopping season cash advance loan. About 41.0% will shop at electronic stores, 36.3% at clothing stores, and 28.8% at grocery stores. With increased cyber deals from retailers, 27.6% said they would shop online.
A modest 10.3% said they would get to stores to scour for deals as early as midnight, according to the survey, while 28.8% said they would arrive around dawn, between 4 a.m. and 6 a.m. Another 28.2% said they would shop between 7 a.m. and 9 a.m.
Some stores are extending hours on Black Friday so consumers have more time to shop for their "doorbuster" deals.
Toys R Us announced last week it will open at midnight on Thanksgiving and offer deals 70 deals then and 50 more "doorbuster" deals at 5 a.m.
Wal-Mart (WMT, Fortune 500) also said its 810 stores that are not already open 24-hours will pull all-nighters for Black Friday.
U.S. consumer sentiment fell in early November amid a grim outlook for future job prospects, although separate data showing rising imports in September raised some hopes of renewed U.S. economic growth.
The Reuters/University of Michigan Surveys of Consumers said its preliminary index of sentiment for November fell to 66.0, the lowest level since August, from 70.6 in October. This was well below economists’ median expectation of a reading of 71.0, according to a Reuters poll.
“Importantly, the decline in confidence was already in place before the announced increase in the unemployment rate to 10.2 percent on November 6,” the Reuters/University of Michigan Surveys of Consumers said in a statement, adding “the likelihood that the sentiment index would drift even lower in the months ahead cannot be easily dismissed.”
Within the survey, the 12-month economic outlook fell to its lowest since April.
Separately, the government reported the U.S. trade deficit widened in September by an unexpectedly large 18.2 percent, the biggest monthly rise in 10 years, as oil prices rose for the seventh straight month and imports from China increased.
Adding urgency to talks President Barack Obama will have with Chinese leaders in coming days, the monthly trade gap grew to $36.5 billion, from a slightly revised estimate of $30.8 billion in August, the U.S. Commerce Department said on Friday.
Wall Street analysts had expected the shortfall to grow modestly in September to around $31.65 billion.
Both U no credit check payday loan.S. exports and imports had their best month since December 2008. But in a sign of renewed U.S. economic growth, imports grew 5.8 percent in September, the biggest monthly gain since March 1993, while exports rose 2.9 percent.
Some analysts had expected more of an export boost because the drop in the value of the U.S. dollar against other major currencies makes American goods more competitive overseas.
But “the overall upturn in U.S. demand is trumping the fall of the dollar,” said Craig Peckham, an equity trading strategist with Jefferies and Company in New York.
Imports of industrial supplies and materials showed the biggest gain in September, suggesting that U.S. manufacturers are ramping up for production.
The average price for imported oil leapt to $68.17 per barrel and imports from the Organization of Petroleum Export Countries increased to $11.9 billion in September, both the highest since November 2008.
Another report showed U.S. import prices rose for the third straight month in October, pushed up by a jump in the cost of fuel imports and the depreciating dollar.
Import prices advanced 0.7 percent after a revised 0.2 percent increase in September, the Labor Department said.
The weak U.S. dollar is helping to lift U.S. exports, but at the same time, analysts cite it as a factor pushing up the price of oil and other commodities.
Looks can be deceiving, especially in the credit card business.
Major card issuers Capital One (COF, Fortune 500) and American Express (AXP, Fortune 500) recently reported some of their best numbers in months and their stocks have soared. But analysts worry there are a whole host of problems that promise to fester for some time.
Experts argue that banks with big credit card businesses continue to face severe losses as the U.S. unemployment rate climbs towards 10%. And with more and more consumers falling behind on payments, there are concerns that losses for card issuers could worsen from here.
Recent projections published by Moody’s suggest that losses for the credit card industry will not peak until midway through next year, somewhere just north of 12%. (A good rule of thumb is that the level of credit card losses is usually about 1% higher than the unemployment rate.)
At the same time, consumers have increasingly shifted away from credit cards, instead opting to use debit cards for their everyday payments, notes Ted Landis, a senior executive in Accenture’s financial services industry group.
There is also the fast-approaching Credit CARD Act, a sweeping set of new government regulations for the industry that is poised to take effect in February.
Among other things, the new law would restrict the way credit card issuers raise fees and assess credit risk. Banks, as a result, would be left fighting over the most creditworthy of customers, notes John Stilmar, director of financial services equity research for SunTrust Robinson Humphrey.
Fighting back
Credit card companies have not taken any of this lying down, however.
To mitigate some of their losses, lenders have tried both individual and collective forbearance programs. Earlier this year, for example, a group of card issuers — including Citigroup (C, Fortune 500), Discover (DFS, Fortune 500) and Capital One (COF, Fortune 500) — launched a program called "Help With My Credit" for consumers struggling with their credit card payments.
Some banks have also looked to their debit card business for revenue growth or rolled out new offerings altogether. JPMorgan Chase, for example, recently introduced a whole new suite of credit cards targeted at wealthier customers.
But the most visible — and controversial — way that card companies have tried to counter rising losses is by raising rates on cardholders.
Between last December and July of this year, the 12 biggest credit card companies have raised the median annual rate by two percentage points or more, according to a recent study published by the Pew Charitable Trusts.
Those efforts have only intensified in recent months. Capital One, for example, swung to its first profit in a year last month, helped in large part by a massive "repricing" program of its cardholders.
Other issuers have tried cutting corners by either scaling back on rewards programs or instituting additional charges. Citigroup has already imposed annual fees on some of its existing cardholders, while Bank of America (BAC, Fortune 500) is planning on testing a similar program on a select group of customers starting next year, charging between $29 to $99 annually.
Little relief
Some analysts are arguing that those aggressive initiatives are doing more harm than good though.
With Americans up in arms, lawmakers have considered moving up the implementation of the CARD Act to December 1 or implementing a rate freeze until the new legislation takes effect.
At the same time, experts contend that sweeping interest rate increases are putting greater strain on the same consumers that are struggling to stay current on their bills — and hurting card issuers as a result.
"For all intensive purposes, some of those borrowers are getting pushed over the edge," said Stilmar.
Lenders could get a much-needed dose of good news later this week if the latest employment figures reveal a continued slowdown in the number of job losses. That could bolster the widespread view among analysts that credit card losses will peak sometime in 2010.
Still, that may do little to help ailing firms, especially if job growth doesn’t recover quickly, said Mike Taiano, an analyst with Sandler O’Neill.
"The question becomes how quickly can it [the unemployment rate] start to decline," he said. "And I think the jury is still out there."
Until an economic recovery seems sustainable, credit card companies will have little choice but to continue coping with life in a less-profitable, more highly regulated world.
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