***Sub-prime mortgage crisis, nilai tukar USD melemah, unpaid credit card bills rising ...., serentetan kejadian negatif di AS, akan menggoyang status dominasi AS. ***Apa Indonesia perlu teruskan pro-AS , atau, pro-ASIA policy ? Saya kira tim pemerintahan SBY sudah harus siapkan home works sebelum kehilangan arah. ***Pemilu di Thailand telah buktikan rakyat kecil rindu Thaksin. Parpol kita yang mau menang di pemilu 2009, kenapa takut memainkan kartu cinta Soeharto ? Americans' unpaid credit card bills rising Mon, Dec 24, 2007 AP (Associated Press) SAN FRANCISCO - AMERICANS are falling behind on their credit card payments at an alarming rate, sending delinquencies and defaults surging by double-digit percentages in the last year and prompting warnings of worse to come. An analysis of financial data from the country's largest card issuers also found that the greatest rise was among accounts more than 90 days in arrears. Experts say these signs of the deterioration of finances of many households are partly a byproduct of the subprime mortgage crisis and could spell more trouble ahead for an already sputtering economy. 'Debt eventually leaks into other areas, whether it starts with the mortgage and goes to the credit card or vice versa,' said Mr Cliff Tan, a visiting scholar at Stanford University and an expert on credit risk. 'We're starting to see leaks now.' The value of credit card accounts at least 30 days late jumped 26 per cent to US$17.3 billion (S$25.1 billion) in October from a year earlier at 17 large credit card trusts examined. That represented more than 4 per cent of the total outstanding principal balances owed to the trusts on credit cards that were issued by banks such as Bank of America and Capital One and for retailers like Home Depot and Wal-Mart. At the same time, defaults - when lenders essentially give up hope of ever being repaid and write off the debt - rose 18 per cent to almost US$961 million in October, according to filings made by the trusts with the Securities and Exchange Commission. Serious delinquencies also are up sharply: Some of the nation's biggest lenders - including Advanta, GE Money Bank and HSBC - reported increases of 50 per cent or more in the value of accounts that were at least 90 days delinquent when compared with the same period a year ago. Under analysis was data representing about 325 million individual accounts held in trusts that were created by credit card issuers in order to sell the debt to investors - similar to how many banks packaged and sold subprime mortgage loans. Together, they represent about 45 per cent of the US$920 billion the Federal Reserve counts as credit card debt owed by Americans. Until recently, credit card default rates had been running close to record lows, providing one of the few profit growth areas for United States banks, which continue to flood Americans' mailboxes with billions of letters monthly offering easy sign-ups for new plastic. Even after the recent spike in bad loans, the credit card business is still quite lucrative, thanks to interest rates that can run as high as 36 per cent, plus late fees and other penalties. But what is coming into sharper focus from the detailed monthly SEC filings from the trusts is a snapshot of the worrisome state of Americans' ability to juggle growing and expensive credit card debt. The trend carried into November. As of Friday, all of the trusts that filed reports for the month show increases in both delinquencies and defaults over November 2006, and many show sequential increases from October. Discover accounts 30 days or more delinquent jumped 25,716 from November 2006 and had increased 6,000 between October and November this year. Many economists expect delinquencies and defaults to rise further after the holiday shopping season. Mr Mark Zandi, chief economist and co-founder of Moody's Economy.com, cited mounting mortgage problems that began after this summer's subprime financial shock as one of the culprits, as well as a weakening job market in the Midwest, South and parts of the West, where real-estate markets have been particularly hard hit. 'Credit card quality will continue to erode throughout next year,' Mr Zandi said. Economists also cite America's long-standing attitude that debt - even high-interest credit card debt - is not a big deal. 'The desires of consumers to want, want, want, spend, spend, spend - it's the fabric of our nation,' said Mr Howard Dvorkin, founder of Consolidated Credit Counseling Services in Fort Lauderdale, Florida, which has advised more than 5 million people in debt. 'But you always have to pay the piper, and that can be a very painful process.' Filing for bankruptcy is no longer a solution for many Americans because of a 2005 change to federal law that made it harder to walk away from debt. Those with above-average incomes are barred from declaring Chapter 7 - where debts can be wiped out entirely - except under special circumstances and must instead file a repayment plan under the more restrictive Chapter 13. Personal finance coaches say the problem is most grave for individuals who are months delinquent or already in default - like Mr Kenneth McGuinness, a postal clerk from Flushing, New York. His credit card struggles began nine years ago, when he charged his son's college tuition and books. He thought he was being clever: His credit card's 6 per cent 'teaser' interest rate was lower than the 8.6 per cent interest on a college loan. Mr McGuinness, 61, soon began using Citibank and Chase cards for food, dental work and copays on doctor visits and minor surgeries. Interest rates surged to 30 per cent. Now he's US$37,000 in debt and plans to file for bankruptcy in February. 'I tried to pay what I could and go after the high-interest accounts first,' he said. 'But it just kept getting higher and higher, and with late charges and surcharges I was going backward.' In the wake of the jump in defaults on subprime mortgage loans made to borrowers with poor credit histories, banks have been less willing to allow consumers to consolidate credit card debt into home equity loans or refinanced mortgages. That is leaving some with no option but to miss payments, economists said. Investors also are backing away from buying securitised credit-card debt, said Mr Moshe Orenbuch, managing director at Credit Suisse. But that probably has more to do with concerns about the overall health of the US economy, he said. 'It's been getting tougher to finance any kind of structured finance - mortgages, automobile loans, credit cards, student loans,' said Mr Orenbuch, who specialises in the credit industry. -- AP http://news.asiaone.com/News/Latest%2BNews/Business/Story/A1Story20071224-42314.html _________________________________________________________________ im is proud to present Cause Effect, a series about real people making a difference. http://im.live.com/Messenger/IM/MTV/?source=text_Cause_Effect
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