What’s rarely being talked about is how the credit card companies are at risk of going bankrupt. Many may applaud; but I say not so fast. Most of these credit card companies have created or are linked to banks, hire large numbers of employees and their “credit” (your debt) is bundled and sold to Wall Street which is connected to your 401K. As foreclosures and job losses rise astronomically many consumers are simply not paying their credit card bill which is creating huge losses for credit card companies. As quiet as it’s kept credit card companies such as Capital One Financial Corp. and American Express have received a combined $6.7 billion dollars in taxpayer funded bailout money from the government. Do you notice your credit card interest going down? Are you even being offered more credit? I didn’t think so. A matter of fact some of these companies are canceling the credit cards of borrowers who pay their bills in full each month. Why? Credit card companies ONLY make money when borrowers pay interest. Borrowers don’t pay interest if they don’t have balance and/or they’re bankrupt and can’t afford to pay.
The bailout money is designed to save the credit card companies who are facing bankruptcy not their consumers who are often facing foreclosure and bankruptcy. But the real puzzle to solve is what is going to happen once that bailout money runs out? We may first begin to see job losses in the credit card industry and then we will see the bankruptcies of some of the largest credit card titans, that is if they don’t manage to finagle another bailout first.
