After years of mailing over a billion credit card applications a year, the credit card companies may be turning over a new leaf.
The offer from American Express: get up to $300 if you pay off your balance and close your account.
The pendulum swings in the other direction.
The reason? As with mortgage debt, credit card debt has been securitized and packaged into trusts that sell bonds. These are known as ABS, for Asset Backed Securities.
Yes, your debt is someone else’s asset.
Apparently, some of these truste are at or over the limit of delinquent accounts, so this is the way to clean up the portfolio.
Credit card defaults are just under record highs.
The credit card industry has already said it would reduce available credit by some two trillion dollars this year, so we should expect more of these moves to decrease credit card limits.
Hey, that is almost as much as the bank bailout money spent so far!
So, check the mail, may be a way for you to get money from the credit card companies, for a change.
