Monthly Archives: August 2010

For Credit Card Issuers, a Scramble for Profits – WSJ.com

Card companies are struggling to recover from $1 billion in losses racked up last year as a result of the financial crisis. Auriemma Consulting Group, a New York firm that specializes in the payments industry, estimates that card companies could earn about $4 billion this year. That is less than a quarter of the record $18 billion earned in both 2006 and 2007, according to Auriemma, which doesn’t include financial results from American Express Co. or Discover Financial Services Inc.

“We will all have to get used to lower profits, lower credit lines and higher interest rates. There’s no precedent for this,” said Megan Bramlette, a director at Auriemma.

Data show that the pace of delinquencies and defaults slowed in July, which is expected to help stem industry losses and even help banks post profits because they no longer need to set aside as much cash to cover future losses.

Credit-card companies are struggling to recover from $1 billion in losses racked up last year as a result of the financial crisis.

But the slowdown of delinquencies isn’t expected to help the bottom line as long as unemployment stays high and purse strings remain tightened. Those conditions don’t help growth. The amount of outstanding credit-card loans shrank 10% last year, to $772.19 billion, due to tighter lending standards and a drop in consumer spending, according to the Nilson Report, a Carpinteria, Calif., industry newsletter.

Those loan portfolios are continuing to shrink. Chase, one of the largest issuers, has shaved more than $20 billion from its $127 billion portfolio. Over the past year, the bank has pulled back credit from its riskiest and least profitable customers.

via For Credit Card Issuers, a Scramble for Profits – WSJ.com.

via For Credit Card Issuers, a Scramble for Profits – WSJ.com.

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Wikinomics – Time banking: The currency of the social world?

I recently had a look at time banking models in the UK. Without covering the different concepts and applications of time baking, here’s the idea in a nutshell: People receive time credits for voluntary and community activities, instead of receiving money or no reward at all. So for hour of activity, one receives one time credit. One principle of time banking is equality, it makes no difference if a doctor or a homeless person performs tasks to earn credits – every activity has the same time credit value. Time credits can then be exchanged for services from other time bank members, for services of community organizations, or leisure activities like free entrance to a theatre show. A local organization organizes and facilitates the exchange.

via Wikinomics – Time banking: The currency of the social world?.

via Wikinomics – Time banking: The currency of the social world?.