Card crisis came from the U.S. to Europe

Once experienced in the U.S. is booming credit card industry was now at risk. Although signs of improvements have already appeared, a high unemployment rate may well be the reason that the level of defaults on credit cards will remain high and the next year. And the wave is rolling on the side of the Atlantic to Europe. Earlier this week, some industry representatives have surprised experts by announcing a decline in July, the level of non-repayment of debt on credit cards, but the largest operator of MasterCard and Visa company Capital One has presented the growth rate of debt relief from 9,73 to 9,83%. On this basis analysts predict improvement in the overall situation, not earlier than the end of the year. Experts point out that the U.S. adopted new laws to protect consumers' interests will put pressure on profitability for a long period of time. "Business credit cards will have to painfully adjust to these changes and next year", - said Sterne Agee analyst Henry Coffey. For many years, the industry flourished. In the treatment was given 700 million cards, ie approximately 2.5 for every American. Now, in debt bondage on the cards were 44% of their holders. The problem with this was for the industry at a time when, during the economic recession, unemployment has overstepped 9%. Since the majority of operators to register steady growth of defaults on loans and the high level of write-downs, forcing them to become increasingly cautious in issuing credit cards. Despite the figures announced by Capital One, experts still believe that no later than the end of the year the situation for all operators discharged. In the end, for several consecutive months, the number of defaults on loans, which would have occurred immediately after the signing of the contract decreases. This kind of indicator that the quality of loans in the financial statements as a whole improves. In the future, new guidelines on consumer protection will hamper the sector's profitability. In particular, they prohibit the excessive increase in fees and penalty interest. Experts estimate that the revenues American Express and other operators until recently to grow at 20.5 billion dollars by masked in the contracts in small type of penalty fees and additional interest. Now, as experts believe, this figure should be the industry average half. Now managers who touched innovations, trying to find them and some positive moments. "Personally, I think that the new rules for the industry of credit cards are very useful," - said MasterCard CFO Martina Hund-Mejia in an interview with Handelsblatt, according to which, now the relationship between the consumer and the card issuing bank has become much more clearly regulated. "Even I understand that there is registered in small type, very difficult" - confessed Ms. Hund-Mejia. Implications of the United States new legislative directives already quite noticeable. Given that the possibility of using high penalty interest is limited, began to increase basic fees and interest. At the same time not as widespread as before, the practice of providing free maps associated with expensive credit card bonus programs. However, in the long-term renaissance of cash, which would be dangerous for operators of credit cards, Martina Hund-Mejia not believe. "I do not think that the number of credit cards will be less - she said. - People are too accustomed to comfort, they provide them.