Victoria Givens: Porn is not Recession Proof

[RawAlex]

The adjustments that the credit card companies are making are pretty much criminal in nature. I can understand re-evaluating people's credit, I can understand raising rates over time (in keeping with the default rate of overall credit, example). Heck, I can even understand adding fees for processing or other.

What isn't acceptable is to be doing all of the above at the same time in dramatic and short term fashion.

Moving someone's CC rate up from 8% to 15 to 16% overnight without warning is terrible. Adding service fees just to use the card or to receive a bill is terrible. Moving the minimum payment levels up by more than double is a recipe for disaster. In many ways, it appears that the credit card companies are trying very hard to make customers default.

I am suspecting that the credit card companies have been watching balanced owed numbers and started to realize that more people are getting desperate and are willing to run their credit cards up trying to keep from going broke. The CC companies know that if that happens, they will have to join a list of creditors and hope to get paid over a very long period of time. For what it is worth, it just isn't a very good time to be in the credit business - any credit business.

Overall, they appear to be going too far too quickly and way to agressively, and I think in the end they will find themselves regulated and no longer able to do these things, which will in turn lead to tighter credit requirements and fewer cards in circulation.

[miz_wright]

Originally Posted by RawAlex

The adjustments that the credit card companies are making are pretty much criminal in nature. I can understand re-evaluating people's credit, I can understand raising rates over time (in keeping with the default rate of overall credit, example). Heck, I can even understand adding fees for processing or other.

{snip}

Moving someone's CC rate up from 8% to 15 to 16% overnight without warning is terrible. Adding service fees just to use the card or to receive a bill is terrible. Moving the minimum payment levels up by more than double is a recipe for disaster. In many ways, it appears that the credit card companies are trying very hard to make customers default.

Doing all of the above AND lowering someone's limit - even those who are paying in a timely manner on a monthly basis, at or significantly above minimums - is a recipe for disaster. We were talking about it this morning, and I strongly feel that this is the banks' way of making SOMETHING. They're not making any interest on B2B loans (0% interest, Fed? Really?), so stab the consumers.

*ponders*
Hmmm. Why does that sound SO FAMILIAR?

[Paul Markham]

We are getting more and more declines than ever. We expect it to continue.

As for what the credit card companies are doing, I think they are covering their asses and making sure they don't go under or have to ask again for a nail out. How customers will react after the worse of this crisis is over will be interesting. Will people be as irresponsible with spending again, will they load their cards like they did and how many will move to debit cards and only spend what they have?