HSBC so eloquently said “”The Rights Issue enhanced HSBC’s signature financial strength and this, together with the start made to 2009, means we are well-positioned to ride out the economic uncertainty ahead, and to take advantage of opportunities to grow.”
Translated, this actually means HSBC was bleeding red ink, raised US$17.8 billion in a rights issue, and paid 8 cents per share.
To justify this position, HSBC exited auto financing, lowered available credit limits on credit cards, raised credit card interest rates, lost OCC protection in a Supreme Court ruling, and shut down the remainder of HSBC Finance.
HSBC claims the bank will continue credit card operations in the United States. However, an new credit card bill of rights is set to take effect soon, prompting more HSBC loses as abuses will not be tolerated.
Look for HSBC to exit the credit card business soon. The bank already ran off many good creditworthy customers, while many other accounts are not sustainable.
HSBC’s latest idea is to charge $10 to receive the telephone number for customer service, after which HSBC charges another $15 to make a payment by phone, and/or $20 for a rush payment. A “rush payment” is required if a customer pays within four days of the due date, otherwise the payment might be “late”.
Other credit card companies, such as AT&T, Citi, and Chase have real customer service telephone numbers, and process your payment within minutes, even on the due date.
HSBC does not compare favorably.
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