Credit card companies face struggle on unpaid bill

Due to economic crisis, this is the credit crisis, confidential is the first thing to do because financial institutions don't rely on each other. The end of this crisis may be no lenders, no borrowers. Many credit card companies face the hard time because economic crisis cause people lost ability to pay their credit card debt. Default rate is higher than expected and lead credit card companies as potential bankruptcy.

That could mean some noticeable changes with your Visa, MasterCard and American Express, from higher interest rates to a more aggressive chase against unpaid debts.

According to canadian press They said: Earlier this month, Statistics Canada reported the economy shed 34,400 in December, pushing the unemployment rate up three-tenths of a point to 6.6 per cent.

Although interest rates are declining the spreads are widening, in some cases consumers may pay more (interest) than in the past just because they are more risky than other consumers.

The banks are the bellwether of the credit industry, and they've been making major changes to how they lend to consumers because they're afraid of defaulting accounts, says Ian Nakamoto, director of research at MacDougall, MacDougall and MacTier Inc.

In good economic conditions they want larger balances, and for consumers to pay less (on their credit card bill) and more late payments," he said. "But, at this point in the cycle (they're trying) best as possible to get them to pay back as much as they can.

A study by the Vanier Institute found that average household debt in Canada surged to over $90,000 last year, while the total debt to disposable income ratio climbed to 140 per cent.

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News: Credit card use declining on VISA and MasterCard

Today, I have an interview for new job. Within 30 minutes I get to go. And I rapidly search on the internet for the news for you, my blog reader. I saw that US people tend to use less in credit card for eliminate their credit card debt. And This is news from CNN Money below.

NEW YORK -(Dow Jones)- The U.S.'s largest banks reported a sharp decline in credit card spending last quarter, sending shivers through investors in credit card companies Friday.

Bank of America Corp. (BAC) and Citigroup Inc. (C) both on Friday reported credit card spending down sharply compared to a year earlier; BofA reported spending down 17.2% and and Citigroup reported spending down 15%. JPMorgan Chase & Co. (JPM) on Thursday reported spending down 8% year over year.

Credit card spending data "was far worse than we expected," KeyBanc analyst Anurag Rana said in downgrading Visa Inc. (V), MasterCard Inc. (MA) and Heartland Payment Systems Inc. (HPY) to neutral from buy.

Visa shares declined 7.8% to $45.51 in recent trading, MasterCard shares declined 5.1% to $123.65 and Heartland Payment shares declined 4.3% to $15.68.

UBS AG analyst Jason Kupferberg also warned Visa and MasterCard shares were likely to be volatile following the earnings reports of the big banks.

But Kupferberg said investors should bear in mind that Visa and MasterCards are more than just U.S. credit card companies, and that U.S. credit card volumes likely fell off more dramatically during the fourth quarter than in the rest of the world.

Still, KeyBanc's Rana said MasterCard and Visa were still tied strongly enough to the U.S. economy that the decline in credit spending justified his concern - he estimated that about 60% of Visa's payments volume was in the U.S. during its 2008 fiscal year. Meanwhile, he said that about 41% of MasterCard's volume came from the U.S. in 2008 fiscal year.

MasterCard is scheduled to report its fourth-quarter results, and Visa is scheduled to report results for its fiscal first quarter in early February.

Because this is the short news but you can see the original at CNN money

News: Democrats try to reform credit card Act

Now, this is 8.00 AM when the time I usually read news from various source. I am interested in credit card field and today I am searching in google news in tem "credit card". I found the latest interesting news - Reforming credit card Act led by Democrats. This Reform is tend to tighten credit card industry, especcially applying more rules that prevent credit card collapse. There is include unfair interest rate charged to customer. Actually google news forward me to Reuters and the quote shown below is the part of this news.

WASHINGTON, Jan 15 (Reuters) - Democratic U.S. lawmakers said on Thursday they reintroduced credit card legislation aimed at curbing "unfair and deceptive" practices against consumers hit by unexpected rate increases and other fees.

The action comes almost one month after the Federal Reserve approved final rules to prohibit a number of highly criticized practices starting next year, but lawmakers said the Fed rules failed to go far enough sooner to rein in the industry.

In the Senate, Charles Schumer of New York and Mark Udall of Colorado introduced credit card reform legislation authored last year by U.S. Rep. Carolyn Maloney of New York.

Maloney plans to reintroduce her "Credit Cardholders Bill of Rights" in the House of Representatives, which approved it last year.

I hope this act will reform as soon as possible to help the people reduce their burden of credit card debt.