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Report: Whitney says Credit Cards are the Next Credit Crunch

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March 10, 2009 – Comments (4) | RELATED TICKERS: SZK , SCC

[Nothing new in that headline per se, but Meredith Whitney gets into some interesting details, in my opinion.]

Prominent banking analyst Meredith Whitney warned that "credit cards are the next credit crunch," as contracting credit lines will lower consumer spending and hurt the U.S. economy.

Few doubt the importance of consumer spending to the U.S. economy and its multiplier effect on the global economy, but what is underappreciated is the role of credit-card availability in that spending," Whitney wrote in the Wall Street Journal.

Rest of article

4 Comments – Post Your Own

#1) On March 10, 2009 at 12:54 PM, awallejr (83.91) wrote:

In my opinion this is a good thing.  People need to stop their deficit spending anyway. 

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#2) On March 10, 2009 at 2:22 PM, Gemini846 (57.37) wrote:

I was in church this sunday and listening to someone talk about how this recession is longer than some of the previous ones because people are starting to outlast thier "wealth" defined as how long they can tap assets to outlast the downturn.

The fact is that most of these people were already tapping thier assets (HELOC) during the "upturn" so rather than dumping that CC on to the HELOC they just stay maxed. Banks get nervous and jack up rates and make them rather unpayable.

Speaking of. I need to call BoA and ask for a rate reduction. Lets see how this goes.

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#3) On March 10, 2009 at 2:51 PM, elboxeo (< 20) wrote:

I cant imagine how many luxury things will go  unsold when the concept of credit( paying stuff later for use of it now) goes out the window.

 

i imagine it will be alot harder for people to fork over that1100 bucks cash to buy that tv rather than putting it on the card. I highly doubt most of those people have ever even seen 1100 bucks cash at one time in their lives...

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#4) On March 10, 2009 at 6:42 PM, AnomaLee (28.58) wrote:

This is from May 2008:

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