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Credit Crunch: Coming To A Wallet Near You
For Immediate Release
December 8, 2008
December 8, 2008
Contact: Kevin McVicker
Shirley & Banister Public Affairs
703-739-5920/800-536-5920
kmcvicker@sbpublicaffairs.com
Shirley & Banister Public Affairs
703-739-5920/800-536-5920
kmcvicker@sbpublicaffairs.com
CREDIT CRUNCH: COMING TO A WALLET NEAR YOU
Banks Tightening Lending Standards
Stowe, VT—Casey Research today announced alarming new findings in the tightening of individual credit standards, which will impact Americans’ Christmas shopping—and the ability to make payments in 2009.
According to a November report by the Federal Reserve, nearly 60% of banks severely tightened their lending standards on credit card loans and 65% on other consumer loans in the last three months. As unemployment and delinquency rates go up and lenders are trying to minimize their risk, the average American suddenly finds himself cash strapped.
“Credit card companies are being more selective to whom they issue credit,” said Olivier Garret, CEO of Casey Research. “Many Americans may have noticed that while their mailbox used to burst with junk mail of the ‘You’re Pre-Approved’ sort, these days the influx has slowed down to a dribble. That’s no coincidence – credit card direct mail offers in the third quarter of 2008 have seen a 28% drop year-over year as Visa, AmEx & Co. are struggling to cope with a tidal wave of defaults.”
“Credit issuers have added more risk factors to determine who qualifies for credit. Aside from late bill and mortgage payments, now location, profession, and even shopping behavior are considered. If you live in a high-foreclosure area, work in the real estate, automotive, or construction business, and buy your household necessities at Wal-Mart, you may find it harder to get credit.”
Moody’s Investors Service reported that uncollectable accounts rose 48% in August compared to the same month last year, the 20th consecutive annual increase. This number is expected to go even higher in 2009, potentially exceeding the charge-off rates during past recessions. Thus, credit card members are increasingly coming under scrutiny – and not just those in the subprime category. Customers with a credit score of 700, who were deemed ‘most creditworthy’ just a year ago, are not anymore. According to cardratings.com, 730 is the new 700.
“Credit is being tightened to the point of being scarce. Now is the time to stop living beyond your means and consider investing in commodities,” said Mr. Garret.
Casey Research is a team of highly experienced investors and trained economists who spend countless hours researching powerful economic trends and the very best ways to profit from same. Their clientele is made up of individual and institutional investors who share the costs – through subscription fees - in exchange for unbiased research and information they can use in managing their portfolios to produce above-average returns.
To schedule an interview, please contact Kevin McVicker with Shirley & Banister Public Affairs at (703) 739-5920 or kmcvicker@sbpublicaffairs.com
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