New credit card data bad for American Express and banks

When banks, credit card issuers stop raising interest rates to insane levels, the debtors can more likely pay these accounts down or off totally. It is the insanely high interest that they place on those that are having difficulty which ultimately forces them into trouble or bankruptcy. When these companies stop being so stupid about their business, things will improve.

The banks are raising some consumers credit card rates as high as 28% thus causing the payments to be almost double. Not to mention cutting many consumers credit lines in 1/2 causing many consumer to be near the limit on their line of credit. This causes all 3 credit scores and your FICO score to drastically drop. The banks will do anything to make money. Even if it causes long time good customers to default on payments. Due to the above changes. The banks are causing their own demise.

The reason the high intrest rate is becasue they are hedging the defaults. Not all are losers but alot of people give up, banks dont want you to default, if they call the bank they will work to at least get there money back. If you have 10 card holders and each carry a balance of say 3500, if 40% default in this market you have to charge 28% on the other 60% to cover your butt and barley step ahead.

Nate, What really bothers me about these interest rate hikes the banks are doing to consumers is. So many people have a tough time keeping up with their bills as it is right now. We give billions in tax dollars to these banks. Then the banks turn around and screw all the people. Who were forced by our Government to help them. It really pi**is me off. The banks are doing this to people.

The banks are going bankrupt. In truth, they are marginally capitalized. The rediculous credit card rates are just driving more households into delinquency/default.
But of course, it is too difficult for the asset risk managers to figure out that if you lower the rates (and their profit) more of the payment will go to principal rather than interest and the bank's balance sheet will actually be improved.
It is this mentallity of greed where the bankers would rather have 100% of nothing than 50% of something. Throw the B-school brains out the their ivory towers in head offices and put a few business people in who have experienced credit cycle ups and downs before.
These are the same Einsteins who took a simple mortgage, scuritized it (in their minds) and then created four or five derivative instraments out of thin air.
Just look at the disaster they have put on EVERY AMERICAN FAMILY.
These guys may be out of jobs, but they have created soooo much wealth for themselves over the past 5-8 years, the recession/depression could go on for a decade before they even feel slightly uncomfortable.

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