To the credit card companies:

BOO Fin' WHOO

Oh my God! You mean now that they took away everyone's credit cards and refinanced mortgages, people can't afford to spend money they don't have? What a shock!!!

Funny sign - the Palace Grill in Chicago has one just like it. When they're closed, their sign says, I think, "Thank God We're Closed!"

Such a shocker that people maxed out their cards and now can't pay! Giving people money they couldn't afford to payback..that sounds familiar. I guess they didn't learn from the housing fallout.

In India, or in USA? Last time I called in English, I was served by THREE different people with impossible Indian accent. Since they couldn't fix a simple address mistake, I called French line. Luckily, those one aren't outsourced to India. It took the rep 30 seconds to fix the damn mistake!

@Jonbo298: I don't know, in this case I'm kind of on the credit cards side. People too dumb to read the contract, or do a budget (at least approximately, in their head), shouldn't own a credit card.
You can't fix stupid.

Are any other credit card companies as 'scared' about this as AMEX? I have heard about them cutting credit limits on their credit cards - which they promptly did on my blue card.. Meanwhile Citi seems to be taking a different approach increasing the limit on my card through them (I would assume to entice me into using it more).

AMEX also imposed a 'temporary spending limit' on my gold card - which to me almost seems like false advertising as one of the features of the card they tout heavily is no spending limit. I realize that they are likely within their rights to do this but the principal of it is the card requires an annual fee for the 'privilege' of being a gold card member - I pay for a no limit card therefore I want a no limit card. Odd that they would go and hack off one of the major things people like about the card to begin with. Seems overly cautious to me - and frankly makes it much less valuable to me as far as convenience is concerned.

@nicemarmot617:

Oh my God! You mean now that they took away everyone's credit cards and refinanced mortgages, people can't afford to spend money they don't have? What a shock!!!

I know isn't it a shock... Whodathunk that would happen?

@Victo: Say wha?

@Victo: hmm.. So do you speak French or do they speak english?

Nariman Behravesh is a great name for anagrams:

Nirvana Shame Herb
Rehab Mean Varnish
Barmen Naive Harsh
Brave Mannish Hare
Her Bananas Rev Him

The signs have been there for a long time. Party's over,time to pay the piper.

This will be good for some folks...Folks that have lived within their means,saved and invested (not gambled,invested)and generally not gone overboard with a bunch of rapidly depreciating consumer toys. Those people will do fine.

Some however...Well, live by the easy payment plan,die by the easy payment plan. I take no joy in what's about to happen to these people.There is going to be some real pain and heartache. Broken marriages,split families,alcoholism,etc. But...

But. Some have been warning for years that our government and their citizens are overextended.Credit has been too easy. Credit card pushers and the 200 channel 24/7 wishbook that people stare at every day has sold them a bill of goods.You don't build welth this way. Deep down inside,I think everyone knew it was a mirage,that the whole "boom" we saw was just borrowed prosperity.Now ,it's the morning after and we feel kinda queasy.

I'm just glad credit card companies will be forced to appreciate people who pay off their balances each month. They're getting their come uppance for calling people who pay in full "deadbeats" for all these years. Really, when something's that broke, this kind of thing is inevitable.

@Victo: What about those who fell onto hard times and HAD to rely on credit? Not everyone is buying big screen TVs and basketball tickets. Some people probably LOST THEIR JOBS, since, you know, unemployment is up, and had to rely on credit cards to live.

I'll never understand this, "YOU ARE DUMB! if you fall in hard times!!! Know how to budget! Oh, wait? Don't have money to budget WITH? STLL DUMB!"

I mean, really. Have some compassion and common sense. I'd imagine most people don't WANT to rack up tons of debt.

Man I have been spending money lately like I was an AIG executive... I said I wanted to cut back like everyone else but I find myself with a lot of things such as tires for three cars... fix'n a oil leak... two birthday parties... and the thing I didn't need the most, tickets to a NFL game!

I don't live on credit and I have yet to dip into savings but I am thinking that I really need to stop my spending to be on the safe side....

It's about time credit card companies ate it for encouraging hard working Americans to spend more than they make. No more numerous credit card offers in the mail, no more buy now pay later temptations! Cheers to that in this oncoming credit card mess!

If they could only fathom giving people good interest rates and only giving a moderate amount of credit to consumers they wouldn't have people defaulting at this rate. Lower the interest and people can pay, it's pretty simple really. Instead they charge 30 dollar late fees and over credit limit fees and jack the interest rates up sky high. If you are late making one payment what makes them think they are helping you by charging a late fee and then raising the rates? They are simply trying to make their money off you as quickly as possible and then when you go into full default they can write you off on their taxes as they destroy your credit.

@AMetamorphosis: BOO! HOO!

happy halloween :)

@little stripes: Here's a news flash from yesteryear:

Way back when, in the 1920's, people used to SAVE during good times, instead of buying hummers and jungle gyms. Then, when bad times came, they HAD MONEY in the bank, totally ridding them of the need to BORROW IT.

I know this is totally foreign to everyone born after 1960, but it used to work pretty well. Just saying.

@Gokuhouse: You're suggesting a healthier but less lucrative business model?

Good luck.

Why do these doom articles always get quotes from companies struggling anyway, like AmEx, JC Penny, Circuit City, etc? Of course they want a recession to blame.

Isn't this a reflection of what was going to happen sooner or later anyway? If you keep poking the penguin, it will bite you. If you keep racking up charges, while avoiding the payments, it will come back to bite you. It's not a matter of "if" - it's a matter of "when."

It was just a matter of time before the economy stopped people from coasting on credit, and accruing massive fees. If people won't control themselves, and avoid debt, than the economy will make people even poorer, even worse, and the majority of us can't say we didn't see it coming for these people who have been using their credit cards irresponsibly.

@little stripes: The problem isn't that someone lost their job. Its always been considered a good idea to have three to six months worth of your gross income in an emergency fund (which we just used to call savings).

That way, if you both were to lose your jobs, you could not change a thing and go six months without touching credit. But then again, if you both lost your jobs, you had better change some habits.

I would bet you, stripes, that the VAST majority of those who owe credit card debt are not unemployed. Considering unemployment isn't even 10%. So that means, by your logic, the ratio is no less than 1:9, probably somewhere around 1:3. I would doubt its 1:2 to 1:1.

Meg, oh please, lets not go yellow journalistic here. Seriously a .3% drop in consumer spending is NOT the house falling in. .3% on our family budget is around $300. This is FUD.

Now if you are talking 3-5% drop in consumer spending that is something worth talking about. It will be interesting to watch your next report when Obama is in office and the drop is another .3%. Should I expect a headline that says --

Economy: Consumers Still Spending, Only a Bit Less.

don't worry. government will bail out credit card overspenders next. retards who live within their means and actually save will foot the bill.

@JohnMc:

I definitely agree.. all this THE SKY IS FALLING bullshit.. give me a f*cking break.. come now.. I see the Four Horsemen of the Apocalypse riding up my street now.. maybe the doomsayers are correct.. OMFG.. OMFG.. the sky really is falling, the sky really is falling...!!!!

COUNTERPOINT - Strangely, if leveraged consumers with huge debt can keep up the charade for 3-5 years, the reward will be huge! The inflation caused by the fail of the US dollar will make all the house prices rebound and today's debt in tomorrow's dollars will be like pocket change! So max out all the credit available at fixed rates (mortgage and home equity, credit cards, etc..) and hang on for the ride! Muuwahhahahahahaha!

@noscamsplease:

Wrong. The governmetn will bail out the compamies, and the consumers will benifit in no way.

@JohnMc: Every time I see the mall loaded with cars to the point where there are no parking spaces and people talking on their cell phones constantly I wonder how much hype there is to this, if the economy was crumbling that badly the malls should be empty and everyone shouldn't be yakking away on their $80/month cell phone plan.

@idip:

i kinda consider have my debt go from thousands of dollars to zero (and no tax penalty) a bit of a benefit. just me.

@AMetamorphosis:
No kidding. What does a company that is almost entirely run by computers need over 7000 employees to begin with? Based on the amount of time you have to be on hold to reach a human - they can't be for phone support.

What's with all the disdain for the credit card companies and no disdain for the idiots that got the cards and lived beyond their means? It's not like the American Express soldier popped out of their card and forced them to spend at spear-point. :D

@quagmire0: awesome.

@AMetamorphosis: Actually, no, this is bad. Do you honestly think that the higher-ups, the ones making all the money, will feel any of this? No, it'll be everyday working people that get canned, and then can't pay their mortgage, end up getting foreclosed on, losing their family, and having to eat out of the McDonalds dumpsters (and McDonalds won't even give them water anymore). Meanwhile your house plummets in value since they happened to be your neighbor, a gang occupies the house, and there's a drive-by shooting every other day.

@howie_in_az: That is why I will be trying to buy any holiday presents I do buy from individuals or smaller businesses. That way I feel like I am more directly doing something to help someone else rather than help some CEO pay for his house in the Caymans.

@little stripes: Um, yea. Can you say medical credit cards? There are lots of hospitals and doctors offices trying to push people to put their medical debt on those nasty things.

Half of the bankruptcies a few years ago in a study were for medical bills.

So Americans, after years of living beyond your means, it is time for the rice and beans diet and buying with cash only. At least will will not get in stupid credit card debt and will lose some weight on that diet. American is probably the only country I know where those on poverty are not skinny. They are overweight. Always find a way for the junk food diet.

@Victo: I'm surprised you had such difficulty, as it seems your grammar is outsourced to India.

@AMetamorphosis:

Like the CC companies expected no punishment for the predatory lending. Credit Cards cry me a river.

@Victo: Yes... French isn't one of those languages spoken far and wide. They could still outsource to places like Haiti, but... no wait, that might not work either. Lucky you, you speak a language that could only be outsourced to countries that can speak it coherently (well, unless it's Canada- Quebecois is a whole different animal).

@Trencher93: Penney's isn't struggling. Now 8-10 years ago they were on the endangered list, but today they're much healthier than most of their competitors (Sears and Mervyn's for example). They had some new leadership and a big push for modernization that helped a lot.

@mpaquette: Sorry, long week.

The point is : why cannot we get good customer service?
Why do we have to use our language skills (Spanish, French, etc.) to get someone that can fix company's mistake?

@little stripes: I agree with you. However, most people I've met were simply irresponsible spenders. Always complaining about the money. But always carrying latest handbag/watch/gadget.

Those who have to rely on credit due to some unpredictable events are a seldom occurrence...

I'm looking to leverage the extra low interest rates into cutting the length of my mortgage more than in half and keeping the same payment.

@Bladefist: Depends on the week... Number of coffees and workload.

@JohnMc: Multiply that $300 times how many consumers? What you're not getting is that the fact that consumer spending is on a downward trend is a problem. Consumer spending has been flat and has dropped the largest amount since 1991. If you're a retailer isn't that important to you?

I won't lie... there was a time in our lives where we needed our credit cards. I was ill, not working, his car broke down, I lost my job, etc. But we did everything in our power to keep our cards from defaulting, even if that meant asking the parents for help, and now we've cut all of our cards up and I'm in the process of snowballing the debts. It'll take a while, but we'll get there.

@IHaveAFreezeRay: [i] If you keep poking the penguin, it will bite you" [/i]

I love that line, you made my day!

@LeoSolaris: Apparently, that doesn't cause italics as expected... everyone, use your imaginations for that typo.