Unpaid Credit Card Debt Increasing
January 15, 2008
More and more Americans are consistently late in paying their monthly credit card bills. Such delinquencies and defaults increased by doubt digit percentages last year, and many experts are warning worse times are ahead. Analysis of the largest credit card companies found the highest rise of defaults were among accounts more than 90 days late.
Many experts see these delinquencies as the result of the subprime mortgage crisis. The Associated Press examined almost 20 large credit card companies and found that the total dollar amount of credit card accounts over 30 days late increased to 26% ($17.3 billion) in October from last year’s figures. This translates to more than 4% of the outstanding principal balances owed to such creditors as Bank of America and Captial One. Defaults rose 18% (almost $961 million) in October, according to filings made with the Securities and Exchange Commission.
Visa suffered $861 million in losses for its latest fiscal year because of lingering legal problems. This was revealed in Visa’s documents prepared for their initial public offering of stock. Visa reached a $2.25 billion settlement with American Express before the much anticipated IPO. The IPO is anticipated to occur in the early part of 2008 and will be the second largest in U.S. history. American Express accused Visa of conspiring to diminish competition within the credit card market. Settlement of the case requires Visa to pay $2.07 billion, spread out over four years. The remaining $185 million will be paid by five member banks.
The Corporate Code, Only $995
