“Credit cards fall out of favour, HP and personal loans in (TVNZ)” plus 2 more |
- Credit cards fall out of favour, HP and personal loans in (TVNZ)
- Credit cards out, personal loans in (3news)
- Banks Still Aren't Making Loans: Fed's Greenlee (Fox News)
| Credit cards fall out of favour, HP and personal loans in (TVNZ) Posted: 28 Jan 2010 10:07 AM PST More Kiwis are choosing to buy goods and services with personal loans and hire purchase rather than credit card, credit agency Veda Advantage says. The agency's data for December 2009 shows a 119% increase in the number of people applying for a personal loan, and a 27.75% increase in the number applying for hire purchase. At the same time, the number of people applying for a credit card during December fell 26%. Veda Advantage managing director John Roberts says the figures suggest that people have become more conservative about their finances and are now looking for more formal repayment regimes. "This is a clear indication that consumer behaviour on how they're approaching credit after the financial crisis has changed," he says. Roberts says typical credit card interest rates are about 21% whereas more structured loans with regular payments like hire purchase or personal loans are around 11%. He says Veda is seeing massive growth in debt cards too, which the agency believes is compounding the decrease in credit card use. The data also shows that applications for mortgages continue to rise - up 28.93% in 2009 compared with 2008. However, Roberts says they would have expected this to be higher if there were more houses on the market. Defaults on loans in 2009 rose both for small and medium businesses, and consumers. Roberts says SME defaults were up a "scary" 38.46% and consumer defaults appear to be stablising with a year-on-year increase of about 8%. Roberts says SMEs tend to lag the consumer credit cycle by about 12 months and he expects more credit pressure to come for the SME sector in 2010. Five Filters featured article: Chilcot Inquiry. Available tools: PDF Newspaper, Full Text RSS, Term Extraction. |
| Credit cards out, personal loans in (3news) Posted: 28 Jan 2010 11:47 AM PST New Zealanders are choosing to purchase goods and services by way of hire purchase or personal loan rather than a credit card, according to the latest data from credit company Veda Advantage. There was 27.75 percent increase in those applying for hire purchase in December 2009 over December 2008 and a 119 percent increase in those applying for a personal loan over the same period. This contrasts with a 26.01 percent fall in the numbers of people applying for a credit card in December 2009 compared with December 2008. Veda Advantage managing director John Roberts said people adopted a more conservative approach to their financial affairs during the economic downturn. "People still want and need to borrow money but many now want a formal regime of repayment and they want to know when they have paid off their debt - people don't want to see their personal debt spiralling out of control." Credit cards have been in the news this year after an agreement between the Commerce Commission and Visa and Mastercard paved the way for retailers to pass on credit card charges if they wanted to. Veda Advantage said the tough economic times were still showing up in default statistics. The number of commercial defaults increased by 38.46 percent in 2009 compared with 2008, while consumer defaults were up 8.86 percent. Property investment still seems to be popular. Applications for mortgages rose 28.93 percent in 2009 over 2008. NZPA Five Filters featured article: Chilcot Inquiry. Available tools: PDF Newspaper, Full Text RSS, Term Extraction. |
| Banks Still Aren't Making Loans: Fed's Greenlee (Fox News) Posted: 28 Jan 2010 07:48 AM PST Despite a more stable financial system, banks are still not lending and the quality of loans on their books continues to get worse as the U.S. housing market remains in the doldrums, a top official at the Federal Reserve said on Wednesday. "Access to credit also remains difficult, especially for households and small businesses that depend significantly on banks for financing," said Jon Greenlee, Associate Director for Bank Supervision and Regulation at the Fed. "Loan quality continues to deteriorate across a number of asset classes, and ... has declined further as weakness in housing markets affects performance of residential mortgages and construction loans," Greenlee said in prepared remarks to a Congressional Oversight Panel field hearing in Atlanta. Greenlee defended the Fed's role in managing the economic crisis of the past two years and said it would continue to push for banks to make loans. "In order to promote credit availability, the Federal Reserve is encouraging banks to deploy capital and liquidity in a responsible way that avoids past mistakes and does not create new ones," Greenlee said, noting that it will take "some time" for a full recovery. Greenlee made his comments ahead of the Fed's decision to leave interest rates near zero and a restated vow to keep them low for "an extended period." The Fed also repeated its pledge to end a massive effort to buy $1.25 trillion of mortgage backed securities by the end of March. "Credit losses at banking organizations continue to rise, and banks face risks of sizable additional credit losses given the likelihood that employment will take some time to recover," Greenlee said. Asked about borrowers who have sufficient cash flow to make payments on commercial real estate loans but are still having difficulty refinancing because of the plunge in appraised values, he urged lenders to rework loan terms with borrowers. "We need to find a way to enable these people that have the ability and willingness to repay, at a certain level, to stay in that property. That's better for the bank and for everyone involved," Greenlee said. Five Filters featured article: Chilcot Inquiry. Available tools: PDF Newspaper, Full Text RSS, Term Extraction. |
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