Capital One Cuts Credit Card Borrowing Limits As US Reduces Support For Unemployed Americans | WHAT REALLY HAPPENED

Capital One Cuts Credit Card Borrowing Limits As US Reduces Support For Unemployed Americans

One month after credit card giant Capital One Financial disappointed investors after reporting losses more than $1 billion for the second consecutive quarter (with 80% of revenue coming from net interest income, of which 60% comes from the card business, the top line was hit really hard), there was more bad news. According to Bloomberg, Capital One - which is perhaps most exposed to the financial state of the US middle class of all US financial companies - is cutting borrowing limits on credit cards, and reining in its exposure as the U.S. reduces support for millions of unemployed Americans.

All of that prompted the company to take aggressive measures ahead of what appears to be an almost certain double dip should fiscal stimulus not be extended in the immediate future. As Bloomberg notes, suspense has been mounting in the credit card industry in recent weeks, as Congress and President Donald Trump’s administration deadlocked on extending $600 in additional weekly unemployment benefits. That assistance has helped millions of households keep up with debts as the pandemic sent unemployment soaring above 10%. As we showed recently, spending by unemployed people who claim ongoing unemployment assistance from regular state programs - which amounts to some 14.5 million people - has tumbled since the July 31 fiscal cliff.

Webmaster's Commentary: 

Whatever credit card debt you may have now, please work to get that paid off as quickly as possible; credit is going, generally, to become infinitely more expensive, and in some cases, close to completely unavailable.

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