Store Cards Turning Into A Nightmare For Retailers

Our eyes shoot fire when stores make their poor employees harass us about opening a store card, so we’re feeling a perverse sense of joy at the news that store cards are turning into a nightmare for retailers.

Sadly, it does seem that a growing pattern of defaults within the store card market may be indicative of a larger more troubling trend.

From the NYT:

The cards, known in the industry as private label credit cards, tend to be held by riskier borrowers with fewer credit options. Losses on the cards are rising at a faster pace than the broader credit card market – reaching a three-year high of 10.51 percent in January, according to Fitch Ratings, up 44 percent from a year ago. That compares with general credit card losses of 7.5 percent, up 40 percent from the year before.

While private label cards account for only about 11 percent of all credit card loans outstanding, their troubles offer a window into the deteriorating finances of some of the most distressed Americans. And the losses may prove to be a warning of deeper problems ahead for general cards as the economy weakens and unemployment climbs.

G.E., the largest provider of private label cards, is looking to quit the business altogether. G.E.’s operation provides cards for such giants as Walmart and Lowe’s, but was unsuccessful when it attempted to sell the division in 2007.

Losses Mount on Credit Cards for Retailers [NYT]
(Photo:Da Nes)

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  1. Ash78 ain't got time to bleed says:

    What hurts even more is that private label cards are also the ones most likely to do 0% promotions, pouring salt in the wounds of losses. That’s a lot less income to make up the difference.

    • Wormfather is Wormfather says:

      @Ash78: I do F&A for a retail furnishings company. The 0% GE promotion was a good part of our buisness. 5-15%. And our customers were some of the good ones they’d pay it off and that would be that (we’re very high end 10K for a sofa high end).

      Well now GE wants to charge us a 5% fee on top of they’re own interchange. Crippling.

      • johnva says:

        @Wormfather is Wormfather: At a high end store, the borrowers are probably less likely to be “subprime”, just because of the expense.

        • Wormfather is Wormfather says:

          @johnva: For the most part, but a good part of my theory about this economic crisis is the idea that people in the middle class were really overextending them self and buying upper class goods to convince them selves that they were in fact upper class.

          Most of the rest of my theory is based on the world using gnome buisiness strategy.

          ???
          ???
          Profit!

    • balthisar says:

      @Ash78: Wow, you’ve got this right. I got a G.E. branded “credit card” for 12 months, no interest to install my goethermal HVAC system. At about 11 months and 15 days, I payed off the balance (online, so no stupid “mailing delays” and such).

      Now I feel like a bad consumer, driving G.E. to this. On the other hand, I’m a smart consumer, because despite having the money up front, I was able to leverage the interest-free loan for almost a year. And no, it didn’t screw up my credit score.

  2. oneandone says:

    I wonder why it took them so long to realize (or notice?) the disaster looming in the combination of letting anyone qualify for the card + incentivizing overspending (20% off whatever you buy today! 10% off next time! Store rewards!).

    • ADismalScience says:

      @oneandone:

      Well, hold on. They’re incentivizing spending. OVERspending is a matter of personal personal and economic failure. Either you can’t manage your own accounts or the prevailing economic weakness have left you without the means to.

      • TouchMyMonkey says:

        @ADismalScience: Well, when you give out the cards to anyone with a pulse, you kind of expect that a large percentage of them fall under the “can’t manage their own accounts” category.

      • wildhalcyon says:

        @ADismalScience: I think you’re missing the point. Regardless of who is ultimately at fault (the overspending consumer who doesn’t know when to quit or the greedy merchant who will take everything they can), the fact is that this is turning out to be a BAD BUISNESS MOVE. They should have figured it out a long time ago, but with so many avenues of easy credit for so long, it was overlooked.

        • ADismalScience says:

          @wildhalcyon:

          It’s not, though. They booked a lot of revenue. Rising defaults hurt, that’s true, but these cards aren’t going anywhere. They’re basically how some stores stay in business.

      • oneandone says:

        @ADismalScience: Good point. I think I was perceiving any kind of spending that requires incentives as unwise, or overspending.

        Regardless, I think they should have understood that while short term gains may have been impressive, the system was unsustainable – unless modifications were made to the card terms, the spending attitudes of the customers, or the desire/economic need of the store to push the cards.

    • Makrel says:

      @oneandone:

      Greed.

    • Wormfather is Wormfather says:

      @oneandone:

      First the discount and the 0% are two different things entirely, GE says to the merchant, you can offer 0% to anyone who quallifies for the card by GE’s standards. You’ll just have to pay us, lets say $50+2% on the transaction.

      The merchant turns it around into a promotion. Spend X and get 0% for a year, where x is enough to cover the fees and other cost of the promotion. Now what’s fucked up is that the merchant is on the hook if too hich a percentage of their applicants default, not in the sense of paying GE back the money but in the fact that the percentage the merchant pay will go up, because they’re screening process sucked.

      On paper its a smart risk for GE though.

      10 customers spend 5K each with 0% apr for a year.
      7 pay off before the year is over
      1 defaults outright, never pays a dime
      2 go over the year.

      In the case of the final 2 there is a 22ish% apr that goes into effect retroactivly, even if they only had $1 left to pay off. They immediatly owe something like 8K on a 5K purchase that will continue to go up until they pay off.

      The 0% apr swoard has a nasty comeback if you miss the deadline.

  3. KevinReyn says:

    they was blinded by the fact that their insane interest rates were paying for $35,000 dollar chests of drawers.

    Executive motto is get in quick make as much as you can as fast as you can then get out get your chute, rinse and repeat. Its the way that short term shareholder driven capitolism works and we are now seeing the end result of that mindset.

    Cheers

  4. Anonymous says:

    My home depot card APR is set automatically at around 20 APR. Maybe if they had a resonable APR people could pay them off. I only use it when they have a 0 percent APR promo.

    • Darascon says:

      @catdogpigduck: I do the same thing with my Sears card, which currently sits at 0 balance, and just did the same thing with an amazon card.

      No interest no payments for XX months is nice, if you can afford a monthly limit to pay it off in the time frame. Budgeting people.

    • kc2idf says:

      @catdogpigduck: Better read the fine print they just sent out — going up to 24.99%!

  5. JGKojak says:

    HA HA!

    Serves ‘em right.

    And here comes the chorus… the same people who claim CEOs deserve multimillion dollar paychecks for all the “risk-taking” they endure, will claim these CEOs who pushed these cards on their companies as a money-making strategy should be bailed out.

    • ZekeSulastin says:

      @JGKojak: … along with the chorus who would like to see nothing more than the heads of everyone even tangenitally involved and those who come in AFTERWARDS.

      Congrats, both of the sides are assholes ^^

  6. Closed captioning provided by Homerjay says:

    Is MY Target store the only one that always asks if I want to open a Target card AFTER they’ve already processed my payment?

    • ElizabethD says:

      @Closed captioning provided by Homerjay:

      Your Target fails! All the Targets I frequent ask before I pay.

    • Trai_Dep says:

      @Closed captioning provided by Homerjay: Sounds like guerilla warfare, passive-aggressive hostility towards suckering customers into getting a card. They ask, but they ask too late.
      They’re one of us. They’re one of us!!

      Or, you know, da ganja.

      • Closed captioning provided by Homerjay says:

        @Trai_Dep: I’m thinking its the former. The people at my Target are all VERY nice until the have to ask about the card. Then they turn into brain-dead shlubs. Once the pitch is over (just a few seconds) they’re back to being sweethearts.

        • DePaulBlueDemon says:

          @Closed captioning provided by Homerjay:

          It’s because they’re forced to ask but really don’t want to.

        • pecan 3.14159265 says:

          @Closed captioning provided by Homerjay: My Target is the same. They’re all really nice, and they just kind of ask about the card really quick, and it’s as if they’re relieved when you tell them no.

          I was at Lord & Taylor the other day, and I was buying something for 70% off. I’m at the counter handing over my $11 and the woman asks me if I want to open a credit card, because I could, “save a lot of money.” I look down at my $10 and $1, and back up at her, and back down at my money, and wonder why she even bothered.

          • Elcheecho says:

            @pecan pi: mine doesn’t ask anymore.

          • BlondeGrlz says:

            @pecan pi: When I worked at Target I hated asking. Now I just shop their and I love that I can insert my CC and sign for my purchase before they’re even done ringing me up, completely negating the need to ask if I want a Target Visa. Besides, I already have one.

    • Anonymous says:

      Actually it’s your purchase that triggers the offer. Usually if you have a large purchase (seems to be between 50-100 or more) or pay with Amex, the system throws out the offer of the store card. If you accept, the card you used won’t be charged. Your purchase is charged straight to your new Target card, minus the 10% for opening the account.

      You can be offered the card even if you already have one. Also, there is a store card, and a Target visa, and you won’t know which one you got until you receive the real card in the mail. The store card is good for your FICO, as you need at least one store card to maximize your score. The Target Visa is just another credit card.

  7. Jon Mason says:

    Hope they are a complete disaster and stores stop offering them. If you’re a clothing store, you’re in the clothing business, not the finance business.

    By all means partner with a credit card: “Amex customers get 5% off” – direct them to a website to sign up or call a number, but dont make your associates responsible for signing people up to them at the point of sale. It takes too much time and distracts your entire business from performing its core functions…

    • floraposte says:

      @masonreloaded: And it pisses off the customers who want to buy actual goods and not credit services. If I’m greeted with a credit card spiel when I walk into a store, I’m no longer finding the situation enjoyable, and I’m going to buy less or nothing at all.

    • Liz11685 says:

      @masonreloaded: I quit a job at a clothing retail establishment for just this reason. They would make me roam the store and sell people the cards- and all the customers would get angry with me.

  8. Eyebrows McGee (now with double the baby!) says:

    “tend to be held by riskier borrowers with fewer credit options.”

    A lot of my friends from overseas who moved to the US temporarily or permanently started with a Sears or Penney’s card. Because appearing suddenly in the US as an adult with no credit history, getting a “real” credit card is a bitch and a half. But Sears and other stores were happy to hand them out with much less hassle.

    Incidentally, it boggles me slightly that a professional who already HAS a Visa or MC in Norway or New Zealand who moves to the US with a job is unable to get a US Visa or MC. The first company that creates a program that lets low-risk folks (like working professionals with no history of default in their home country) “port” their credit card to a new country is going to make bank, even if you have to “pay to port.” (Anything is better than waiting a year to build enough credit history with your Sears card to get a shitty, low limit, high interest rate Visa.) Surely it can’t be THAT difficult to make the computers talk to each other or to assign five guys to assess credit risk of customers moving countries.

    • TWinter says:

      @Eyebrows McGee: I’ve also known people hit by this. European professionals with solid jobs who can’t get credit because they have no credit history.

      I also have a friend who moved to Canada and the same thing happened. She and her husband both had solid credit histories in the US which meant nothing north of the border. All they could get was a secured credit card, i.e. they paid the bank $500 and they gave them a credit card with a $500 limit and told them they could shift to a “real” credit card once they had used the secured card for six months and not gotten into any trouble with it.

      • HogwartsAlum says:

        @TWinter:

        Wow, I didn’t know about this. That’s crazy. It seems really stupid in this day and age that you can’t transfer your credit history. A good payment record is a good payment record, regardless of where you are. And it’s not like you need to put it on a ship to get it over here!

    • JoshRogan says:

      @Eyebrows McGee:”The first company that creates a program that lets low-risk folks (like working professionals with no history of default in their home country) “port” their credit card to a new country is going to make bank, even if you have to ‘pay to port.'”

      Amex already allows this. My wife had a co-branded Amex card that was issued in Korea. When she moved here, Amex used her prior cardholder status to issue her a new card. They even backdated her account to the date when she originally opened her Korean Amex card.

    • DePaulBlueDemon says:

      @Eyebrows McGee:

      My family moved to the United States in 1993, and sure enough the first credit card my parents obtained was from Sears.

    • TreyWaters says:

      @Eyebrows McGee: “Surely it can’t be THAT difficult to make the computers talk to each other or to assign five guys to assess credit risk of customers moving countries.”

      If the credit reporting agencies can’t seem to tie everything together via a common, unique identifier just within the US (maybe they could use your SSN?), I don’t see how they could possibly be expected to correlate data from another, similar agency from overseas. (There’s a world outside of the US?!?! Shocker!)

      Seriously, my dad and I have the same name, and some of his accounts routinely appear on my credit reports. My conversations to get them removed are typically:

      Me: Account xxx is not mine. Could you get it removed, please.
      CSR: We need you to prove that it is not yours. You will have to contact the creditor or the person the account belongs to.
      Me: How about compare the date the account was opened and my birth date.
      CSR: Oh…….OK.

      The sad thing is, I’ve had one CSR not see the problem where an account was open 8 years before I was born. :-)

      • Eyebrows McGee (now with double the baby!) says:

        @TreyWaters: Not the credit reporting agencies — the credit card companies. If Visa Norway thinks you’re a good risk, then why doesn’t Visa USA? And there’s a real economic incentive for them to keep those customers and give them a nice fat credit limit instead of alienating them. I’m not suggesting Visa USA be able to access Norwegian credit histories — I’m suggesting Visa USA be able to access Visa Norway.

        • MrEvil says:

          @Eyebrows McGee: I don’t mean to ruin your example Eyebrows, but Visa is merely the payment network, they don’t approve people for cards. Banks issue them. There are very few banks that brand worldwide and even the few that do can’t integrate each other due to differing banking regulations.

          • Eyebrows McGee (now with double the baby!) says:

            @MrEvil: Hmmm, I still think someone should be able to sort this. Maybe the banks could codeshare like airlines? Just for this specific purpose. “Have a Mastercard with Chase Bank and if you move to the UK, France, or Australia, we’ll work with a local bank there to get you a similar Mastercard issued in your new country. For a trivial fee of $200.”

    • Digitalwanderer says:

      @Eyebrows McGee:

      I ran into exactly this problem when I moved to the states – despite having a perfect credit score in the UK, appearing in the US system aged 30 with no credit history immediately marked me as a leper – even down to the $250 deposit before I could get electricity service at my apartment.

      After about 8 months I applied for a US Amex card to complement the Corporate Card I carry on behalf of the company I work for – they turned me down on the grounds of insufficient history, but pointed out that if I applied for one in the UK, I could then do an international transfer on the account. Note that it has to be a personal account; I held a UK-based corporate Amex for 8 years, and still hold a US one, none of which counts towards a US personal card. Once I had a UK Amex account, I had a US Blue Cash card in my hand 2 weeks later.

    • petermv says:

      @Eyebrows McGee: I did not have any trouble when I moved from the US to the UK. I had a letter of reference from my bank and since I had MBNA cards in the US, they gave me one over here as well. My bank also gave me a credit card when I opend the account. They were used to dealing with this sort of issue.

  9. Mary Marsala with Fries says:

    Yup, because when people are making the hard decisions about which bills they can pay and which they’ll have to default / negotiate / file bankruptcy / etc. on, the crappy cards with stupidly-high interest rates always go first.

    (And if you were them, and had to choose between paying 20+% to Sears and making your mortgage or car payment, I’d advise you to screw Sears as well.)

  10. bohemian says:

    This is just karma for all those retailer that decided selling credit was more profitable than selling actual products.

    All the times people are forced to endure some stupid smarmy sales pitch in order to buy some item of clothing, electronics, or tools, this is payback.

    • KHook321 says:

      @bohemian: Yep. But the thing is, Sears is STILL pushing credit applications more than anything else. If the associates don’t get enough of them, their hours get cut back to almost nothing. It’s to the point where they don’t even give a crap about customer service. It’s “get apps or the sale doesn’t matter.”

  11. squidbrain says:

    So explain to me again why the government is borrowing money to solve a problem caused by people borrowing too much money?

  12. Heather Andersen says:

    That picture made me remember my 2 year cashier job at Target. They pushed for us to ask for those cards so much, but I refused most of the time. Especially when someone is in an obvious hurry and just buying diapers and diaper rash creme. One time they made it so if the guests were not asked to sign up for a Target Visa THEY got a free 20oz soda. I think I gave away 20 sodas in one day. ;) Nevermind the fact that the front end manager made me go bring in carts in the parking lot as a sort of “punishment” every time it happened. For working retail, asking people about those credit cards was the only daily part that I absolutely dreaded.

  13. torqueU says:

    You can get an interest free store card at a clothing store called Von Maur, they are in the midwest. That’s their hook – buy with a card and take ‘several’ months to pay back. Anyone else know of an interest free credit card? Although I suppose technically it is a charge card.

    • TWinter says:

      @dave511: I live in a town with a Von Maur and I’m sure this works for them because they appeal to a more upscale demographic. Let’s face it, if you can afford to blow $80 on a polo shirt, you’re probably not struggling to make your car payment.

  14. Gaambit says:

    I know it’s not the same situation per se, but it pains me to have to ask people about the B&N Member Card at work. It used to be just the regular hassle of bothering people with yet ANOTHER card, but to ask them now to do it by paying another $25 just seems ridiculous, considering the circumstances most are in.

    • pecan 3.14159265 says:

      @Gaambit: But the member card is pretty different. It’s not a credit card, it’s a discount card. Sure it’s $25 for the year, but for people who buy a lot of books or who buy a lot of DVDs and such online (like I do), the $25 is made up over the course of the year by all of the 15% and 20% off coupon codes that I get by e-mail and find off retailmenot.com, all of which require being a member.

      I’ve had as much as $15 knocked off the price of my order because of my membership and coupon codes. It’s $15 I didn’t have to pay to Amazon, even though I love Amazon. I take my business where I can get the best deal, and the member card is really worth it if you do buy a lot of items over the course of the year.

      I do sound like an apologist, I know, but I’ve had the card for at least 3 years now.

      And if you can’t afford, it just say no. When I’m at borders, they try to peddle me their card, and when I say no, they keep on going. I’ve never had anyone at B&N pester me while I was browsing to sell me a card. Not so at Borders.

  15. Cynicor says:

    Speaking of store cards, I think Target is trying something new. When I was at the cashier last Sunday, he said “Would you like to open a Target check card today?”

    Check card? Not charge card? That was a new one on me. Anyone else hear this yet?

    • teapot37 says:

      @Cynicor: My mother got one of these cards recently. It’s a standard debit card, but it earns you points towards 10% off certificates like their regular Visa card.
      Here is some info on the Target website.

  16. am84 says:

    Store cards aren’t entirely bad if you truly enjoy the store and make sure to pay off your bill in full every month. Sometimes, the rewards are worth it. I have a NY&CO card and they send me coupons via e-mail several times a week that are actually great deals just for being a cardholder in good standing.

  17. quail says:

    If I hear another cashier parrot an offer for an in store credit card, I’ll scream. But I’m not one to hate the stores for trying to maximize their profits. It’s the capitalist system.

    What I do hate is when some idiot guy in corporate is trying to maximize profit and they forget about the risks. They put the livelihood of the employees at risk.

  18. MFfan310 says:

    I wonder if this means that Neiman Marcus will finally back off from their so-1980s store card or American Express cards-only policy. It worked in 1987, but is an epic FAIL now for three reasons:

    1) The credit crunch makes it harder for HSBC (the issuer of their store cards) to issue NM cards to new potential customers, turning away new potential customers
    2) Many higher-up customers use Visa Signature/World MasterCard cards with airline miles and other rewards programs, debunking the “all rich people use AmEx” argument
    3) NM has lost sales as a result. Have you seen their same-store sales numbers over the last few months, post credit-crunch? They have done far worse than Saks or Nordstrom, and I think it might have to do with their archaic policy. Plus they may post their first loss in eons as a result of this crisis.

  19. microcars says:

    A friend used to work the contractor counter at Home Depot and part of his “job” was signing up “X” number of new commercial charge accounts….every DAY!

    If he didn’t, management would be on his ass about it.

    He told me there was a point where everyone coming in the store already had a commercial account, so wtf was he supposed to do?
    AND as the housing market wore down, fewer contractors were coming in the store, many times it was just dead.
    Also- many of these commercial accounts were held by fly-by-night contractors who just sort of disappeared last summer and left their accounts hanging.
    Still- Home Depot wanted new commercial accounts signed up.
    Quotas and all.
    Gotta meet those quotas.

  20. kc2idf says:

    My Home Depot card (serviced by Citi) just went up from an already outrageous 21% to 24.99%. I will be closing it shortly.

  21. runchadrun says:

    I bought a new washer at Sears on the day after Black Friday. Instead of putting it on my $0-balance, low-APR MasterCard from my credit union, I put it on my Citibank-issued Sears card because they had a $75 rebate or 0% APR for a year. (I have no idea what the regular APR was, but I’m sure it wasn’t pretty.) Since I was going to pay it off immediately anyway I chose the rebate. I hadn’t used my Sears card in several years and I was surprised that it was still active.

    So who had to pay that $75, Sears or Citibank? I’m guessing it was Sears. I’m also guessing they would have subsidized the 0% interest I would have paid Citibank had I chosen that option.

    (I should point out that, almost 3 months later, I’m still waiting for my $75 check. Sears says I should get it any day now, I’m just hoping it arrives before Sears goes BK)

  22. snowburnt says:

    I had a GE card from financing some online classes…I noticed they had ads up in all my doctor’s offices and jeweler’s stores also.

  23. Jubilance22 says:

    I worked at Express back in college, and as a cashier we would get the biggest hassles if we didn’t ask every single customer to open a card. I refused to do it when someone came in to buy a $10 tank top.

    I’m not so bothered when I’m shopping and the cashier asks, because I know its their job. Just don’t ask me 5 times, one “no” should be enough.

  24. Davezter says:

    For many years, Sam’s club only accepted 1 credit card — Discover. They always had a counter dedicated to signing people up for their “Sam’s Club Discover” which brought the added benefit of also doubling as your membership card.

    We signed up for this card which is actually owned by “GE Moneybank”. GE Moneybank is behind most of these store branded cards and has been slashing credit limits and raising APR’s over the last several months across the board regardless of payment history and FICO score.

    It has been obvious to my wife and I that they have been trying to get out of the business since at least October 2008 because that is when they began turning this card into what has now become the absolute worst one we have. The APR is now so out of line that it is boarderline usery and the credit limit has been reduced so much that it is just a joke to even consider using at this point.

    Luckily, this is the only “store” card we have ever had and the only card we have that is connected to GE Moneybank.

    • erytheis says:

      @Davezter: We have Sam’s “credit lines. When my husband had to buy a new computer for school we put it on that card because it had a 0% interest offer. What they didn’t say was that they would charge some other fee that was like interest. It got paid off in a hurry and we will never use it again. I also have tried to tell the cashiers to get us off the list of the print out offers from the registers and tell them about the bait and switch offer the card pulled last time we use it. They tell us they can’t do anything about it, but somewhere has to be someone who come stop that information from being printed out.

  25. t-r0y says:

    This, my fellow consumerists, is the best news I’ve heard all year!

  26. discounteggroll says:

    I’m sure the wise folks over at the scheinhardt wig company will find a way to spin this into a good thing

  27. chrisjames says:

    Holy mother! 7.5% loss rate? That’s over usury at an annual rate. No wonder credit lines are snapping shut and APRs are hitting over 20% for so many; the banks must be hemorrhaging money (on the books; technically they already gave it all away for nothing). It doesn’t seem possible.

    And 10.51%. Yeah, store brand cards are a doomed practice.

  28. Trencher93 says:

    Told you so – any store making money off extras like extended warranties or easy credit is going to topple. Circuit City was only the first. Sears is headed over the cliff. Who will follow?

  29. ageshin says:

    The old historian strikes again. In the distant past 1960s stores would have their own in house cards. Sears, Wards, Wiebolts, etc. each had their own credit card. The nice thing about these cards was that they could only be used for a particular store chain, thus they rarely had large credit lines. The problem was that the stores then had to have credit dept. that serviced the cards. The big general credit cards coming into use, could offer the stores a cheaper way, they would handle the credit collection etc. The problem was they were general credit cards and could have large credit lines, so the rate of defalts was greater. We see this now with a vengance. As I see it the general credit card is the problem, and it should go.

  30. Anonymous says:

    GE Credit bought the JC Penneys card operation several years ago. Although I have always paid as agreed, GE recently lowered my credit limit. I paid the card off and won’t be shopping at JCP again. I know that it is pointless to complain to JCP but they only hurt themselves by selling the credit card to GE.

  31. deep.thought says:

    For those like me who rarely RTFA, it should be emphasized that GE was attempting to sell the Private Label card division, not the whole huge international GE Money arm which it was a part of, which would be a substantially different story.

    More importantly, just from the simple graph in the article it can be seen that private label card losses as a percentage of total in ’07 were substantially less than the 3 years prior shown, down to half of what it was in ’04, and the ’08 figures still lower than the majority of ’04-’05. The graph demonstrates too that higher risk in private label cards is not a new phenomenon. Finally, the metric chosen for the graph is remarkably misleading, as the credit card losses as a percentage of total outstanding can go up substantially if a sudden mass of people pay off their cards. For instance if everyone except for delinquents use their economic stimulus check to pay down their card, the graph will go up. Which may well be the reason the latter half of ’08 has a positive slope.

    Also, if memory serves me correctly, GE Money’s Corporate Payment Services was put up and sold to American Express in 2008 for a sum nearly equal to that which Bear Stearns fetched. Points: 1. GE is freakin’ ginormous and is constantly buying and selling a ton of businesses in accordance with an actual business plan, 2. Bear Stearns got screwed, and 3. I really wish consumerist would stop perpetuating psychoeconomic disenfranchisement by regurgitating condensed versions of already horribly written statistically abusive context deficient articles and instead applied the same Best Buy treatment of borderline insane suspicion and reactivity to said articles.

    “it does seem that a growing pattern of defaults within the store card market may be indicative of a larger more troubling trend.” And I may be possessed by Princess Diana. The numbers in that article are actually reassuring. Ultimately it says that historically riskier borrowers are still more risky than average risk folks, and that private label credit card default rates are now as bad as they were in 2004 and 2005… years not exactly remembered for their horrendous economic climate. I know as good as anybody that the economy is having a damn rough go of it in certain areas, but framing possibly good news with senselessly negative, factually vacuous bull opinion like “And the losses MAY prove to be a warning of deeper problems” is really, Really counterproductive.