Economic woes hit U.S. credit card business!

JONATHAN STEMPEL

Reuters

July 27, 2008 at 9:00 AM EDT

NEW YORK — Even as Washington Mutual Inc. lost billions of dollars from risky mortgages, the largest U.S. savings and loan could rely on its credit card business to turn a profit. No longer.

The thrift’s $175-million (U.S.) second-quarter loss from its card unit stemmed from higher delinquencies and an inability to sell some card debt to investors because of illiquid markets. It was Washington Mutual’s first card loss since it entered the business in 2005 when it bought Providian Financial Corp.

Washington Mutual is not alone. American Express Co., Bank of America Corp., Capital One Financial Corp., Citigroup Inc. and JPMorgan Chase & Co. face pressure as falling home prices, $4-a-gallon gas and rising food costs leave more cardholders struggling to pay their bills and force even wealthy customers to spend less.

To read the rest of the article from the source where I found it click here. Otherwise here is my take, This is a sure sign that people are robbing Peter to pay Paul. Here is the easy solution “Stop living on your credit cards”! It is the highest cost to borrowing that we have available to us, well that is if you don’t include you local loan shark! There is a better way. My company has helped many people who where drowning in debt to reduce their overall expenses and showed them the road to becoming totally debt free. Put that plastic on ice and call our office to see if we can help.

Cheers,

Pat