Bank of America Shifts Credit Card Unit, Leadership

Bank of America, the nation’s top lender and second-largest credit card issuer, is combining its troubled Global Card Services with its deposits business under Susan Faulkner, who’s been with the bank for 25 years, BofA said today. Faulkner will now head the combined business of “Global Card Services and Deposits” following the resignation of Ric Struthers, who was a principal founder of MBNA and has marshaled Bank of America through the hardship of mounting credit losses.

Geico Credit Cards: Buffett’s ‘Painful Confession’

Warren Buffett — legendary investor and world’s second-richest person — brought himself down a slight notch, financially and humility-wise, thanks to the failed idea of a credit card for customers of Geico, the insurance stalwart owned by his Berkshire Hathaway. Buffett admitted to Berkshire shareholders in his annual letter that his brainchild of a credit card branded to the third-largest U.S. car insurer, which Berkshire acquired in 1996, was a bad idea.

TransUnion: Average Credit Card Debt Still Slipping

With stricter credit card laws taking effect this week, there’s even more bad news for card issuers. The average credit card debt continued its slide in the fourth quarter 2009, down to $5,434, a 3.18 dip from the previous quarter and down 5 percent from a year ago, reported TransUnion. The credit bureau also reported that the national credit card delinquency rate, the ratio of card borrowers 90 days late, increased to 1.21 percent in the fourth quarter, up 10 percent from the previous quarter, but remained flat year over year.

Borrowers Delinquent or in Foreclosure at New High of 15%

The percentage of mortgage loans in the foreclosure process, combined with those at least one payment past due., set a record high of 15 percent, according to the Mortgage Bankers Association report for fourth quarter 2009. Although the MBA stressed that the fourth quarter registered a surprising slight dip in mortgage delinquencies, a trend reversal for end-of-the-year borrowers facing holiday bills and higher heating costs.

Bad Sign for Foreclosures: Credit Cards Taking Priority

A troubling “payment hierarchy” may be here for a while, according to a new study by TransUnion, which reveals that consumers pay their credit cards before their house payment – and more are delinquent on mortgages while current on their cards. That trend is the reverse of traditional payment and delinquency behavior where mortgages take priority. And it is one more ominous sign that the foreclosure crisis may not be close to peaking.

Chase Survey: Most Consumers Down on U.S. Economy

A majority of U.S. consumers see their personal finances as improving, but are mostly pessimistic about the nation’s economic future, according to a new survey from Chase Card Services. The Chase survey found that 57 percent believe they have “turned the corner on their own finances,” while only 39 percent believe the U.S. economy is improving.

American Express Profits Soar; Credit Costs Plunge

Bolstered by a plunge in expenses for futures losses, American Express reported net income of $716 million, or 60 cents a share, up from $240 million, or 21 cents a share, in the same quarter a year earlier. The earnings performance was buoyed by a significant cut in provisions for loan losses – $748 million, down 47 percent compared to $1.4 billion in the year-ago period. The decline reflected continued improvement in credit quality during the latter part of 2009.

Bank of America Sees ‘Stabilization’ in Credit Losses

Bank of America, the nation’s top lender and second-largest credit card issuer, reported a $5.2 billion loss, or 60 cents per share, for the fourth quarter, including its repayment to the government bailout program, compared to a loss of $2.4 billion a year earlier. But the bank sees a glimmer of hope in the “stabilization” of credit losses. Net charge-offs saw the first decline – compared to a previous quarter – in nearly four years.

Credit Card Write-Offs Still Troubling as Reform Looms

Facing a pivotal year ahead with hopes of a turnaround despite looming reform laws, most credit card issuers saw declines in December delinquencies – or the 30-days late rate – but charge-offs are still troubling. Another challenging year ahead for the credit card industry includes the implementation of reform laws next month that are expected to hamper profitability with the toughest restrictions yet on when and how to impose interest rate hikes or penalty fees.

Chase Profit Soars – But Mortgage, Credit Card Losses Mount

Mounting losses on mortgages and credit cards overshadowed an impressive fourth quarter performance in overall profit from JPMorgan Chase, the top credit card issuer and the nation’s second largest bank by assets. Chase today reported fourth quarter profit of $3.3 billion, or 74 cents a share, compared with $702 million, or 6 cents a share a year earlier, beating most analysts expectations.

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