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Vet67to82 (< 20)

Credit Card Debt

Recs

120

December 03, 2009 – Comments (2) | RELATED TICKERS: V , MC , C

If you are following FAZ and FAS it's absolutely necessary to know the components. Visa (V) and MasterCard (MC) both have been reporting declining "credit" card use and increasing "debit" card use, for several quarters now. . Both V and MC process card transactions, NOT card accounts,. The banks issue the cards, carry the debt, and therefore all the RISK. Knowing this helps, should help, to identify as a "bill of goods" any blog, news article, or report that is "hyping" increased risk of card defaults dragging down the financials.

One news report was surprised that a couple of "financials" were only reporting about 36% of the expected write-offs. Surprised! WHY? If people are using their debit cards MORE and their credit cards LESS ( and V and MC, both, are TELLING us this is EXACTLY what is occuring ...) ... it's likely they're paying down debt and only spending money they KNOW they have. Now, this is GOOD for the financials ... but probablly, not good for an economy built on "out-of-control" spending. Hopefully, there is a happy middle ground somewhere out there.

 

Related Tickers  FAS, FAZ, MC, V, C, BAC, WFC, etc

2 Comments – Post Your Own

#1) On December 04, 2009 at 4:59 AM, Andrea09 (< 20) wrote:


If you are going to use you credit card use it with due diligence to avoid incurring any penalty.Did you know that  Kwanzaa is one of the three main end of the year holidays, along with Christmas and Hanukkah, and searches for "Kwanzaa 2009" on Google Trends indicate that some people are wondering when it occurs. Those unfamiliar shall now be illuminated. Kwanzaa is celebrated from the 26th of December to January 1st, every year – the dates of the observance never vary, as Hanukkah's do.  Hanukkah varies in accordance with the Hebrew Calendar, which we’ll get into later. So if you are curious about holidays other than Christmas, there’s plenty of information out there on them, and you won’t need payday loans for an encyclopedia.

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#2) On December 07, 2009 at 1:10 PM, FreeMortal (29.96) wrote:

I agree that CC debt is overrated.  There is about $2trillion in balances with at worst 10% default rate.  Compare this to the trillions that disappeared in the housing crisis.  I believe commercial real estate is only about half again the possible CC "crisis".

Both are pretty bad, but we've just been through a lot worse.

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