... More chilling is the supposedly bullish case for the credit card lenders. As several analysts said this week, over-extended Americans will opt to lose their homes and rent, so they can keep on paying their credit card and auto loans. Perhaps, but that's a tough scenario to grow a business on. [Bullish? Bull comes to mind, but I'm thinking of something ...] ... the credit card industry is still booming, and rising non-payments are coming off low levels. But with the home equity market shut off to tens of millions of homeowners, credit cards are the last line of defense for cash-strapped consumers. If the plastic starts to be pulled even from a small portion of shoppers, watch out! ...
Re: Credit Card Industry Booming, Despite Treacherous Stock Market This Fall
Good read Noah and it is absolutely correct that even a smal amount of credit beig pulled, and it will happen with the rise in the default rate, will shake the market to its britches. The reson I say its bound to happen is the rise in wierdness, not only the **bleep** Amex FRs that are going on right now, but CLDs companies limiting the number of cards per consumer even further.
Discover and Others such as BOFA will have to play a trategy game. No more nose in the air because you had a BK within the past ten years. They are actually going to have to pull some reports and look at payment history on their previous instant declines and ask if they trust this person to repay. You can get a BOFA card right noe with little more than AU accounts but be declined for absolutely perfect payment history over a 7 year period though after the 7 years there is no indication of what the BK was abut on your reports.
This will get more and more interesting as it plays out. I'm interested in app'ing for a Discover early next year. Hopefully, by then the biggest wave in the credit crunch will have crested.