2010 will be the year of credit card reform.
Unfortunately, it’ll also be the year of a significant increase in consumer debt accroding to Cardhub.com founder Odysseas Papadimitriou.
Papadimitriou explains how at the end of last year, debts stopped shrinking and started growing again – a good sign for consumer spending, no doubt, but can shoppers handle their debt?
From Asset Backed Alert:
CardHub.com founder Osysseas Papadimitriou says his analysis of credit-card lending and performance patterns showed that borrowers’ debts not only stopped shrinking late last year, but started growing. He expects the shift to continue in 2010, sipplying lenders with more potential asset-backed bond collateral.
Papadimitriou said US credit-card balances rose $500 million during the final three months of 2009, to $876.1 billion. By his calculation, which takes payments and charge-offs into account, that means consumers charges $21.5 billion more during the fourth quarter than in the preceding three months – a reversal from earlier in the year.
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