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Hi all,

 

I met the Head of a Commercial Bank where I live this week. We talked at length about the local economy and then we got onto the Credit Crunch. He said two interesting things: firstly, he'd been told by Head Office to stop growing his loan book (it had grown +50% each of the last two years) even though it is in good nick (no sub-prime here yet). Secondly, in discussing European problems he noted that Credit Card debt was still growing very swiftly. We agreed this was probably people getting by on CCs to pay the daily bills and the mortgage. He thought the banks would pull the rug on this soon, citing possible ways this might happen, including forcing cardholders to pay off a minimum %age of their outstanding debt each month instead of simply rolling it over by paying the interest (he mentioned 50%). Yikes. If that happens, its game over and even I might buy the deflationary argument.

 

Also, I liked this article. http://www.telegraph.co.uk/opinion/main.jh...7/03/do0301.xml

 

CS

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Hi all,

 

I met the Head of a Commercial Bank where I live this week. We talked at length about the local economy and then we got onto the Credit Crunch. He said two interesting things: firstly, he'd been told by Head Office to stop growing his loan book (it had grown +50% each of the last two years) even though it is in good nick (no sub-prime here yet). Secondly, in discussing European problems he noted that Credit Card debt was still growing very swiftly. We agreed this was probably people getting by on CCs to pay the daily bills and the mortgage. He thought the banks would pull the rug on this soon, citing possible ways this might happen, including forcing cardholders to pay off a minimum %age of their outstanding debt each month instead of simply rolling it over by paying the interest (he mentioned 50%). Yikes. If that happens, its game over and even I might buy the deflationary argument.

 

Friend came clean last week about the state of her affairs.

 

22k in debt. Paying the mortgage with credit cards.

 

Note to self: Don't discuss the economy with anyone without understanding their personal situation. Either that or prepare to lose a lot of friends.

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"This is not just any slump, this is an M&S slump" :-)

 

I'm surprised credit card spending hasn't been squeezed more tightly already, and wonder if a full-blown 'credit crunch II' will hit them in the same way it's hit mortgages so far. High streets could suddenly start to look like estate agencies do now... tumbleweed central.

 

My personal credit card spending dropped off a cliff yesterday. Barclaycard took offence at a a payment going out of my account and slammed the brakes on hard. The fact these people (1899.com, for remarkably cheap phone calls) had taken two payments in the last few months didn't seem to allow them through as part of my regular spending pattern.

 

It makes me wonder if B'card getting a little twitchy about fraud and the cost of (them) dealing with it. This is the second time this year that's happened to me, and I'm a pretty reliable customer in terms of both my spending pattern and my payments.

 

Andrew McP

 

 

 

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I find this graph a bit surprising. It is Net Lending on Credit Cards. If it is right, it suggests that most lenders have already [more than] halved their credit card lending (compared to 2005)

 

Does anyone have another graph that shows something different? I got the graph data from the Bank of England Website.

 

It is: Quarterly consumer credit> Net lending> Seasonally adjusted> Total of which credit card - LPQVZQX - Quarterly

 

creditcardnetlendingyt8.jpg

 

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I find this graph a bit surprising. It is Net Lending on Credit Cards. If it is right, it suggests that most lenders have already [more than] halved their credit card lending (compared to 2005)

 

Does anyone have another graph that shows something different? I got the graph data from the Bank of England Website.

 

It is: Quarterly consumer credit> Net lending> Seasonally adjusted> Total of which credit card - LPQVZQX - Quarterly

 

creditcardnetlendingyt8.jpg

 

So in July '06 there was almost no net lending.

Possible? :unsure:

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So in July '06 there was almost no net lending.

Possible? :unsure:

It’s not impossible. I had a look at the monthly data as a check. There are many months when net lending on credit cards is negative

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I own alot of credit cards, although I rarely use them it is just so I have access to cash if I need it quickly like a cheap repo property came up etc and didn't have time to get a mortgage. I have noticed the limits on the cards I have applied for over the last year are tiny on average £1500-£2000 where as a couple of years back I would say the average was around £6000 so the graph looks spot on to me.

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Hi all,

 

I met the Head of a Commercial Bank where I live this week. We talked at length about the local economy and then we got onto the Credit Crunch. He said two interesting things: firstly, he'd been told by Head Office to stop growing his loan book (it had grown +50% each of the last two years) even though it is in good nick (no sub-prime here yet). Secondly, in discussing European problems he noted that Credit Card debt was still growing very swiftly. We agreed this was probably people getting by on CCs to pay the daily bills and the mortgage. He thought the banks would pull the rug on this soon, citing possible ways this might happen, including forcing cardholders to pay off a minimum %age of their outstanding debt each month instead of simply rolling it over by paying the interest (he mentioned 50%). Yikes. If that happens, its game over and even I might buy the deflationary argument.

 

Also, I liked this article. http://www.telegraph.co.uk/opinion/main.jh...7/03/do0301.xml

 

CS

 

Well not trying to be smart or anything, but i've never paid a penny interest ever on credit cards. Back in the 90's i read about a man who constantly changed his cards earning free interest, gifts and what ever he had as a balance he kept in a bank account earning interest. Did the same myself and earned a few hundred quid over 2 years.

 

Now i just use a c.c for rewards. Know an awful lot of not particularly wealthy people that do the same. Unfortunately i also know some that use it to pay off mortgages etc.

 

The sooner this form of lending is curtailed the better for me, as it just doesn't make sense. Sure have one for holidays big purchases and pay a bit of interest odd times, but mortgages...MADNESS!

 

Just my thoughts.

 

Riggers

 

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Friend came clean last week about the state of her affairs.

 

22k in debt. Paying the mortgage with credit cards.

 

Note to self: Don't discuss the economy with anyone without understanding their personal situation. Either that or prepare to lose a lot of friends.

Only 22K mortgage? Not too bad. Or do I get this wrong?

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Only 22K mortgage? Not too bad. Or do I get this wrong?

 

My fault, not very clear.

 

22k unsecured debt.

Hubby just been made redundant (was a builder on the books with (no idea))

 

 

 

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