Thread: industry may scale back credit lines by $2 trillion

A news story that came out on Reuters this morning said the credit card industry is poised to trim over $2 trillion in available credit over the next eighteen months. This was represent a 45% decrease in available credit compared to what we have today.

Other key points:

• Millions of high risk accounts are expected to be the credit card issuers.
• Interest rates may be raised further.
• Home prices are expected to fall another 20% which will further weaken consumers liquidity.

The source of these predictions in the article was Meredith Whitney, a banking analyst.

Originally Posted by magyar1045

This would be in direct conflict with the bailout idea. The bailout was supposed to free up money for consumer borrowing/spending.

Exactly. This is the total opposite of what they are suppose to be doing. I understand *maybe* trimming credit lines on some high risk accounts but there should be lower interest rates across the board for all borrowers, whether they have good credit or bad credit. Credit cards are an important financing method many small businesses use since it's nearly impossible to get a SBA loan or traditional loan nowadays for it.

This is what happens when you give handouts without strings attached. They will be used and abused.

Hopefully though credit lines won't be slashed as this analyst is predicting.

We need a congressional investigation into this matter asap. I mean seriously this had got to be the biggest scam of the century. Where is all this money going??? We are giving out so much money and the banks are doing exactly what they shouldn't be doing with it. This is so wrong.

Individuals pay something like 88% of all taxes and corporations only pay 12%. All of us - the 88% - are paying trillions for the 12% and getting no benefits from it at all. How can Bush rip on the democrats all the time so bad and say they are socialists and not conservative. Look at him! His administration has got to be the most socialist, fiscally irresponsible one there ever was!!!

Originally Posted by magyar1045

Even the FOX News Network - the Republican propaganda machine - slammed Bush and Paulson on this bailout gift to the banks.

Don't you find it odd that the Republicans were so gunho about bailing out the banks but when it comes to the auto industry asking for a tiny fraction, they throw a fit? I don't suppose this has anything to do with Wall Street being in Bush's pocketbook and Detroit not....

We need a congressional investigation into this matter asap. I mean seriously this had got to be the biggest scam of the century. Where is all this money going???

Well they shoved the financial bailout down our throats and (as I think mentioned on Credit Card Forum previously) CA Rep Brad Sherman was telling the media how the Republicans were telling them there would be "marshall law in a week" if he and the others didn't approve the bailout immediately.

Congress should give Detroit their money which is peanuts in comparison to these other bailouts. Instead congress should be analysing the banks use of their money, line by line, and make sure the rest of it gets used how it was meant to be.