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Tuesday, October 30, 2007

The Next Ticking Bomb..Consumer Credit?

The Consumer Credit Outstanding has been a concern for a while. But it is the first time I have seen MSM pick this up.


Target says it's credit card receivables rise faster than sales in September.

http://money.cnn.com/2007/10/29/magazines/fortune/consumer_debt.fortune/index.htm?postversion=2007103013

Then American Express (Charts, Fortune 500) said that it too was seeing
"signs of stress" and would boost its loss reserves in its core U।S. card unit
by 44%. Capital One (Charts, Fortune 500), Bank of America (Charts, Fortune
500), and Washington Mutual (Charts, Fortune 500) all said they are bracing for
a 20% or higher increase in credit card losses over the near and medium
term।

And in Britain it looks just as bad.

It's a sign of the times that, according to one survey last month, 6% of British homeowners have been using their credit cards to pay their mortgages.

Here is a graph of Consumer Credit as of August 2007.


Click on Image for larger Image.

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