September 29, 2005 Credit card delinquencies shot to a record high in the second quarter, as consumers tried to keep up with rising gas prices and increasing interest rates without curtailing spending, a report showed yesterday. The percentage of credit card accounts that were 30 days or more past due rose to 4.81 percent during the April to June period, up from a revised 4.76 percent in the first quarter, the report from the American Bankers Association found.
“What the delinquencies tell us is that there are more people who are under financial stress,” said James Chessen, the association’s chief economist. “The rise in energy prices is sucking up much more of households’ budgets than they ever did.” According to consumer advocates at HSBC Watch this means tougher times ahead for HSBC Finance Corporation - the old Household International. “While some consumers may go to HFC or Beneficial Finance for temporary relief others are cash strapped, resulting in more loan losses for HSBC. There may be a spike in profits through HSBC Taxmasters rapid tax refund loans, which will be a good indicator of how much the average family is hurting” said the group.
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