According to an article in the Washington Post, Capital One Financial lost $276 million in their second quarter, due to continuing losses from its credit card loans. Capital One’s U.S. credit card business was down by 51 percent in 2009 compared to last year’s numbers.
The article said:
“Chief executive Richard D. Fairbank told investors and analysts in a conference call Thursday that the McLean company expects worsening unemployment to lead to further losses from delinquent cardholders. The company now forecasts unemployment to rise to 10.3 percent by the end of the year, up from its earlier 9.6 percent prediction.”
“We expect continued increases in U.S. card charge-off rates through 2009 as the economy continues to weaken,” Fairbank said.
With an increased number of job losses many consumers are allowing credit card loans to go into default as they fight more pressing issues such as foreclosure. Ironically, the flipside of the credit card defaults are consumers who are extra diligent in their attempts to stay current and avoid keeping a credit card balance just in case of a future job loss. Both consumers who default on their credit card loans and those who avoid carrying a credit card balance are pinching away at Capital One’s profits.
For those debtors who use credit cards, it is probably in your best interest to avoid carrying a credit card balance especially in this time of turmoil where even the most stable industries are subject to job losses. If you’re a debtor struggling to repay credit card debt, fighting foreclosure or facing other financial issues, bankruptcy may provide a viable option to put your financial house in order. To find out how bankruptcy can help you discharge or repay debt under reasonable terms, contact a Dallas-Fort Worth bankruptcy attorney today.