U.S. credit crisis is hitting the wealthy!
NEW YORK - July 28, 2008 - The U.S.
financial crisis is spreading from subprime borrowers to wealthier consumers,
with evidence mounting that more affluent people are failing to pay their
mortgages and credit card balances.
Growing concerns over the financial health of richer borrowers are prompting banks and card issuers to tighten lending practices in moves that could futher dampen consumer confidence and spending more.
Banks such as J.P. Morgan Chase and credit card groups such as American Express have clamped down on lending to customers that have traditionally been regarded among the safest and most profitable borrowers.
“The crisis is just starting to spread beyond the middle class,” said Curtis Arnold, founder of CardRatings.com. “Even folks with good credit-ratings scores are no longer immune from adverse actions from their card issuers.”
Senior bankers say that after the subprime debacle, the worsening outlook of “prime” portfolios shows the crisis is far from over and could inflict substantial losses on financial institutions.
