Credit Cards: Weighing Bad Debt Against Any Debt At All
Bank uber-analyst Meredith Whitney wrote in The Wall Street Journal that the economy will have more problems as banks take credit cards away from people to prevent bad debt write-offs. She says “Just six months ago, I estimated that at…
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That leaves a possible revival of consumer spending in a hell of a mess. Most consumers are having such a rough time with their current debt along with the possibility of unemployment that they are hardly spending any money at all. If the economy begins to get better, their credit cards may have been taken away by their banks. They may have a tiny big of money to spend, but no easy way to do so. That should slow the recovery by a significant amount.
Then there are those few people who do have money now and might be enticed to spend it as deflation brings the prices for almost everything down. And there are people who will have more money because of proposed tax cuts. Without credit cards, will those people pay cash? Not likely.
Banks have already pulled massive amounts of credit out of the system by denying new loans to businesses and consumers. And extinction of the credit card will make that a lot worse. The only solution may be for the Treasury to issue plastic to consumers. Instead of the MasterCard (MA) or Visa (V) logo, they can carry a picture of President Obama.
Douglas A. McIntyre
Contact [email protected] for any questions or corrections.
Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
