Credit Concerns

November 13, 2008 6:07:33 PM PST
Treasury Secretary Paulson says its not enough to just buy out troubled assets. The focus now is bailing out credit card companies, so that money will circulate throughout the economy.While this may help banks stay secure ... many local consumers aren't convinced it will work.

Shopper Lacey Missaghian said, "Yeah, but its maxed out, so I don't have any right now, I had to cut it up. Get rid of it."

Maxed out ... it's at the root of credit card companies' downward spiral. With too much credit being given out and not enough people paying their bills, banks are having a tough time supporting an economy that can't stay afloat. Financial consultant, Sandy Brown says the problem starts with consumers.

Sandy Brown said, "If you are not making your payments, then now the bank does not have the cash flow that they need in order to sustain themselves."

Sustaining banks, and the credit card companies they represent is crucial. Which is why some law makers say there's no other option, but to bail them out.

Sen. Christopher Dodd said, "Credit is the lifeblood of the economy, it is absolutely essential to business and consumers."

Without credit, economists say you, the consumer, will no doubt feel an impact. No credit means no money being spent which can lead to fewer jobs and an even more unstable economy. Repercussions some valley shoppers say they can't see now ... and aren't sure if they'll ever have the chance.

Terri Rubinow said, "I think its ridiculous. I think what they should do is get the head people at the credit card companies and fire all the head people. I hope it works. That's really what I think."

Some credit card companies are already in line to get a share of the proposed bailout. Wednesday, American Express reportedly asked the government for $3.5-billion dollars.

-----------------------------------------------------------------------------------------------

abc30 News Links:
Links to other news sections on our website.

-----------------------------------------------------------------------------------------------

Breaking News Alerts:
Click Here to Sign-Up for Breaking News E-Mail Alerts
Receive Breaking News alerts in your email inbox.


Click Here to Sign-Up for Text Message Alerts
Receive Breaking News alerts right on your cell phone.


-----------------------------------------------------------------------------------------------

Load Comments