Summary
Easy loans are no longer a case for many consumers. Many of the country's major credit card issuers are almost "in defense" to reduce credit limits, increase their interest rates for customers with problematic credit scores, and sending out fewer applications for new customers in response to tougher economic times and rising default rates.
Bank of America and Capital One has been posing new and stricter policies for their Visa and MasterCard holders. "In this environment, particularly now, do always make your payment on time and pay as much as you can. Don't do anything to increase your credit risk. Don't be late on your payment. Don't exceed your credit limit," as a tip provided by Bill Hardekopf, chief executive officer of http://www.lowcards.com/
As we can all see, the ripple effects are enormous. With this tightening up for credit requirements, a great deal of lives will be affected in many ways, and harsher policies are something definite that we can all be expecting for.
Connection - Bank Credit Cards
As told from the text book, Credit cards are used so much in our society that we can visualize a society without money -- a cashless society. We are so used to credit cards that many individuals and merchants would be badly affected if their use were ever discontinued. With bank credit cards, consumers can make purchases on a short-term credit at any retail outlet that accepts the bank's credit cards.
The article talks about how major chartered banks that sponsor and provide the credit card system are lowering their credit limit, and uping the interest rates for many. Also, the increasing reluctance to accept new customers since mid-2007, when the global economy encountered a disruptive turmoil and creating an uproar of confusion in prices across the country and worldwide. Since then, a "disorderly chaos" has developed in the financial states of many.
Reflection
The declining availability of the plastic money is a sign to the financial state of a country, and currently, people around the world are experiencing a declining in both of their disposable (cash) and "disposable" (plastic) money. With the increasing minimum payments and tightening terms and conditions on existing cardholders. I think that it will for sure be changing the daily living patterns of many.
Easy loans are no longer a case for many consumers. Many of the country's major credit card issuers are almost "in defense" to reduce credit limits, increase their interest rates for customers with problematic credit scores, and sending out fewer applications for new customers in response to tougher economic times and rising default rates.
Bank of America and Capital One has been posing new and stricter policies for their Visa and MasterCard holders. "In this environment, particularly now, do always make your payment on time and pay as much as you can. Don't do anything to increase your credit risk. Don't be late on your payment. Don't exceed your credit limit," as a tip provided by Bill Hardekopf, chief executive officer of http://www.lowcards.com/
As we can all see, the ripple effects are enormous. With this tightening up for credit requirements, a great deal of lives will be affected in many ways, and harsher policies are something definite that we can all be expecting for.
Connection - Bank Credit Cards
As told from the text book, Credit cards are used so much in our society that we can visualize a society without money -- a cashless society. We are so used to credit cards that many individuals and merchants would be badly affected if their use were ever discontinued. With bank credit cards, consumers can make purchases on a short-term credit at any retail outlet that accepts the bank's credit cards.
The article talks about how major chartered banks that sponsor and provide the credit card system are lowering their credit limit, and uping the interest rates for many. Also, the increasing reluctance to accept new customers since mid-2007, when the global economy encountered a disruptive turmoil and creating an uproar of confusion in prices across the country and worldwide. Since then, a "disorderly chaos" has developed in the financial states of many.
Reflection
The declining availability of the plastic money is a sign to the financial state of a country, and currently, people around the world are experiencing a declining in both of their disposable (cash) and "disposable" (plastic) money. With the increasing minimum payments and tightening terms and conditions on existing cardholders. I think that it will for sure be changing the daily living patterns of many.
5 comments:
I think that you were right about how people in the society is so used to using credit cards. A cashless society is definitely ahead of us. But I think that a cashless society is not that bad either. A cashless society can be good and bad. The good point is that, people won't be afraid of losing money. The bad thing is that banks would have the biggest income because they would probably charge more on credit cards.
-M. Li
I agree that obtaining a loan nowadays is much more difficult than it was in the past. I did not realize that this may be due to the economic state that many countries are experiencing right now and therefore may be the reason for less cash circulating amongst the economy. With cash being not a very conveinent item to carry around in large amounts as opposed to a plastic card that can hold up to thousands of dollars, a cashless society is unfortunately what our society is heading towards in the near future.
I think that this is definitely a bad time for increasing interest rates. I understand that the banks are rising the rates because they are making less profit, but their actions will make the situation even worse. The whole world is already in a recession right now, higher rates will only result people consuming even less than before. What banks should do right now is to lower the rates and release more promotional offers to attract new clients and encourage current clients to consume more.
Now that our economy is going down, increasing the interest rate isn't that great of an idea. Many people are relying on credit cards to pay for items since they won't get their paychecks until the end of the month. If interest rates are increasing, people will tend to pay with cash more, and which will mean they will buy less. Businesses will earn less, meaning less profit. If this occurs, this will only drag our economy to drop even more. For now, I think things shouldn’t be changed too much, or it could affect our economy in a bad way.
These tough credit rules have really had their toll on employent. The US government recovery plan (trillion dollar bail out) announced by President Obama should surely help create more jobs and help reduce the current interest rates.
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