Leadpile's Blog» Citigroup

Credit Card Bubble About To Burst?

Mari H. — Mon, 17 Nov 2008 14:29:43 +0000

Credit cards are a way of life for most Americans. According to Time.com, in the last 10 years credit card balances have gone up 75%, yet consumer’s wages have gone up only 4%. Increased balances and the number of credit cards consumers have, has allowed credit card companies to reap the rewards for years. These credit card companies have always survived in tough economic times because they were able to generate lots of revenue from things such as late fees, however more and more consumers are now facing charge off. The charge off rate for default consumers is expected to reach 10%, which is double what the rate has been for the past 10 years. If there are more charge offs, that means credit card companies will be in the RED, because defaults/charge offs will far surpass the revenue they are bringing in from things such as late fees. So, what does that mean will happen?
In the case of American Express, they just became a bank holding company in order to receive some low cost funds and a piece of the $700 billion bailout. In the case of Citigroup, they layed off 10,000 employees and will begin imposing higher interest rates on it’s 54 billion cardholders. With other credit card issuers, there is bound to be some increased interest rates passed down to the cardholders and increased fees. The only way to really avoid the effects of these credit card issuer’s hardships, is for consumers to manage their money better where they avoid any additional late fees and also look at not incorporating any new debt. The only option I can see is looking at debt consolidation or debt settlement to avoid getting in a deeper hole. Leadpile Lead Exchange generates a lot of debt leads where consumers need help and need help now. Hopefully, they can ride the wave before any sort of credit card “bubble” bursts and they are affected in an even worse way.

AZ Attorney General Asks Lenders For Help

Mari H. — Fri, 10 Oct 2008 14:28:56 +0000

In an effort to help distressed homeowners, Arizona attorney general Terry Goddard is asking mortgage lenders to set up streamlined modification plans for their mortgage customers. This is similar to what Countrywide recently rolled out to their mortgage customers. In addition to AZ, there are 9 other states such as California, Ohio, Illinois, and Texas. According to The Phoenix Business Journal, the lenders these states are approaching are Wells Fargo Home Mortgage, JPMorgan Chase, Morgan Stanley Home Loans, HSBC Finance Corp, Citigroup, and American Home Mortgage Servicing Inc.
I am not sure why all 50 states are not apart of this action, however it seems like a logical way to start putting a dent in what is going on with all the bad loans on the books. I hope we will hear more about this, because this might be one of those occasions where we WANT the government to get involved.

Consolidation Of Banks = Higher Fees?

Mari H. — Tue, 30 Sep 2008 14:22:48 +0000

With today’s news about Wachovia Bank being purchased by Citigroup, this leaves pretty much 3-4 major banks out there now. For instance, there is Wells Fargo Bank, Citigroup, JP Morgan Chase, and Bank of America. According to Business Week, this could mean the cost of taking care of your money, or getting new loans could cost consumers more money. “The larger the bank is, theoretically the more power they have to set pricing and other policies,” said Nancy Atkinson, senior analyst at Aite Group, a financial services research firm. “I expect we’ll start to see free checking accounts start to disappear, and rates on overdrafts could go up. Savings rates could drop, Business Week says.” Also, things such as customer service and answering questions, could be a little hard to get taken care of with these new consolidation of banks. Therefore, those that are maybe wondering how this bank consolidation affected them… maybe soon will see.
Will all these changes cause industries such as payday loans to become more popular, because consumers getting loans with their banks won’t happen as easily? Time will tell how this will affect Leadpile Lead Exchange and the types of leads we are bringing in.