Jan. card payments wobble, but trend is positive
By EILEEN AJ CONNELLY
NEW YORK - The nation's six biggest credit card companies reported mixed results for customer payments in January, splitting evenly between those that had lower defaults and those with increased write-off rates.
But even with the small upticks, analysts say the long-term trends point to continued improvements as the companies keep tight reins on problem customers and remain cautious about lending.
Standing out among the pack is Discover Financial Services, which reported a sharp drop in defaults, to 2.75 percent of balances on an annualized basis, from 3.15 percent in December. Discover's late payments also edged down, to 2.31 percent of balances, from 2.32 percent the prior month.
Only American Express Co. has lower rates, with its January defaults at 2.2 percent of balances and late payments at 1.4 percent.
All of the major companies saw spikes in defaults, known as charge-offs in the industry, and late payments, or delinquencies, during the Great Recession. Moody's Investors Service estimates the six banks wrote off more than $75 billion in uncollectible balances in 2009 and 2010 alone.
Discover's payment metrics have improved at a faster pace than peers like Capital One Financial Corp., which posted a default rate of 4.08 percent, and Chase, which reported a 4.25 percent charge-off rate for January.
The company said in December that its rates were at historic lows, and they have fallen further since. That was predicted by a drop in late payments several months ago, said Moody's analyst Jeff Hibbs. "We've seen that coming," he said.
The results reflect improved collection practices and more careful lending. American Express's lowest-in-the business rates in part can be attributed to the same factors, but it also has a more affluent customer base to rely on, which helped mitigate its losses when the economy turned.
"It reflects all the work they've done over the last three to four years," said Cynthia Ullrich, an analyst with Fitch Ratings, noting that the company has fine-tuned its collection strategy.
Bank of America Corp. had the highest rates for both measures for January. It has been trading places with Citibank for the past several months in that position.
Bank of America , Chase and American Express reported lower rates of late payments in January, while Capital One and Citibank both posted upticks in past due by one month or more. But the increases were not substantial, and there is a seasonal factor that typically sends late payments higher in January as card holders try to deal with holiday debt.
Both analysts said they expect defaults to continue to fall. The pace of improvement may slow, however, if the economy sputters.
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Read More»Summary Box: Markets fall, then rally, on Greece
By The Associated Press
GREECE IS STILL THE WORD: The stock market languished for most of Tuesday, weighed down by news that Greece's debt talks were on the verge of breaking down the country's economy shrank 7 percent in the fourth quarter. Stocks rallied in the final 20 minutes after a report indicated Greece's conservative party leader could help clear the way for spending cuts that lenders are demanding.
NEAR A MILESTONE: The Dow continues to veer tantalizingly close to the 13,000 mark, a milestone it hasn't reached since early 2008, before the financial crisis imploded. The average closed at 12,878.28, its third-highest close for the year.
RETAIL THERAPY: Retail sales rose 0.4 percent in January, less than the 0.7 percent analysts were hoping for. Car sales fell and clothing sales were flat, indicating that consumers are still wary of spending on non-necessities.
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Read More»Rate on 30-year mortgage stays at record 3.87 pct.
By CHRISTOPHER S. RUGABER
WASHINGTON - The average rate on the 30-year fixed mortgage stayed at a record low this week, providing some added incentive for those looking to buy a home or refinance.
Mortgage buyer Freddie Mac said Thursday the rate on the 30-year loan was unchanged at 3.87 percent. That's the lowest level on records dating back to the 1950s.
The average on the 15-year fixed mortgage rose to 3.16 percent, up from last week's record low of 3.14 percent.
Still, low rates have done little to boost the struggling housing market. Rates have been below 5 percent for all but two weeks in the past year. Yet few people can qualify to buy a home or refinance. Many of those who can have already done so.
And some prospective buyers don't want to put money into a home that they fear could fall in price over the next few years.
Sales of previously occupied homes were dismal last year. New-home sales in 2011 were the worst on records going back half a century.
Builders are hopeful that the low rates could boost sales this year. But so far, they have had a minimal impact.
To calculate the average rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.
The average rates don't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for the 30-year loan was unchanged at 0.8; the average on the 15-year fixed mortgage dipped to 0.7 from 0.8.
For the five-year adjustable loan, the average rate rose to 2.83 percent from 2.80 percent, and the average fee was unchanged at 0.7.
The average on the one-year adjustable loan rose to 2.78 percent from 2.76 percent, and the average fee was unchanged at 0.6.
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Read More»Treasurys fall on Greek deal, weak bond auction
NEW YORK - Demand for Treasurys weakened after Greece moved closer to a deal that would prevent the country from defaulting on its debt.
The yield on the benchmark 10-year Treasury note rose to 2.04 percent from 1.99 percent late Wednesday. Its price fell 6.2 cents for every $100 invested.
Earlier Thursday, Greece announced an agreement to cut public spending which had been demanded by the country's lenders. Greece could face a default on its debt next month if it doesn't get more emergency loans.
An auction of $16 billion of 30-year Treasury bonds was met with weak demand. The bonds were sold at a yield of 3.24 percent. There were $2.47 worth of bids for every dollar sold, lower than the average of $2.77 in the last six auctions.
The yield on the 30-year bond rose to 3.19 from 3.15 percent, while its price fell 56.25 cents.
In other trading, the yield on the two-year bill rose to 0.27 percent from 0.26 percent.
The three-month T-bill paid a yield of 0.08 percent.
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Read More»Lehman Brothers sues Citigroup for $2.5B
NEW YORK - Lehman Brothers Holdings Inc. and its creditors are suing several units of Citigroup Inc. to recover $2.5 billion the failed investment bank transferred to a backup account at Citi months before seeking bankruptcy court protection.
In the complaint filed on Wednesday with the U.S. Bankruptcy Court for the Southern District of New York, Lehman claims that Citibank is wrongfully withholding the money as a potential source of funds in a dispute over derivative contracts.
Lehman also is asking the court to disallow what it says are $2 billion of "inflated and legally unsupported" claims that Citibank has asserted against it.
In a statement Thursday, Citigroup vowed to defend itself and its right to recover losses from Lehman's collapse. It called the lawsuit unjustified and accused Lehman of trying to renege on its obligations and claw back assets to which it has no right.
According to the lawsuit, Citi demanded on June 12, 2008, that Lehman transfer between $3 billion to $5 billion into an account to cover potential overdrafts by Lehman subsidiaries that were using Citi's clearing and settlement services.
Lehman agreed that same day to set aside $2 billion from its account at Citibank into a segregated account, on the condition that the bank would have no lien or other rights to the funds.
In its statement, Citi said that it tried to help Lehman prior to its bankruptcy filing, but needed to obtain the guarantees and cash deposits from Lehman in order to protect its shareholders from potential losses.
Lehman claims that by holding on to the $2 billion, Citibank is violating the U.S. bankruptcy code, state law and going against the conditions both agreed to when the funds were set aside.
In addition, Lehman asserts that Citibank has refused to return another $500 million in cash that was transferred into its broker-dealer subsidiary just hours before Lehman filed for bankruptcy protection.
Lehman's bankruptcy filing in September 2008 was the biggest in U.S. history and triggered more than 75 separate bankruptcy proceedings. The company listed more than $600 billion in debts when it filed.
Lehman Brothers Holdings is the company that controls what's left of the investment bank's assets.
Citigroup shares ended regular trading down 57 cents to $33.66 on Thursday. The stock slipped another 8 cents to $33.58 in extended trading.
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Read More»Alternate Uses for Everyday Items
Cleaning The Green Way
Lemons, baking soda, coffee grounds, and soda. These are items the average person keeps in their home daily, but what do they have in common? They, along with a variety of other everyday household items, have many other uses for typical household chores and tasks. Discovering the uses behind these items can not only save time and money, but oftentimes they can be environmentally friendly and a better alternative to the items we're used to buying.
When it comes to cleaning and sanitizing, simple foods can be put to work to accomplish a chore that we usually buy chemicals and cleaners to perform. Lemon Slices can be rubbed along a chopping block to sanitize it after use, as well as remove tough food stains. Adding half a cup of lemon juice to laundry can brighten whites, as well as remove ink spots and other stains when added liberally to the spot before washing.
Baking Soda is also another excellent tool for cleaning. Baking soda can be used to clean and deodorize garbage cans, cloth diapers, stained clothing, and kitty litter pans. Sprinkling baking soda directly into kitty litter or garbage can eliminate nasty odors without the expense of plug-in deodorizers and sprays. Baking soda is also a great tool in emergencies with its ability to put out a grease or electrical fire without causing any additional damage itself.
Toilet bowls can be cleaned by pouring a can of Soda into the bowl, letting it sit, and then flushing. Combining it with a wrap of aluminum foil can help remove rust from a car's bumper, or corrosion from a car battery.
Vinegar can also be used as another handy household cleaner. Vinegar is knows for killing mold, germs and bacteria. It can be used to clean everything from counter-tops to cleaning the lime deposits left in kettles and coffee makers. You can also clean hardened paint brushes. Simmer white distilled vinegar with equal parts water then let the brushes soak for about an hour, rinsing with water afterward.
Used Coffee Grounds are ideal for plants. They make an excellent fertilizer for both indoor potted plants and outdoor garden plants. Working coffee into the soil before planting can not only enrich the nutrients, but keep such pests as snails and slugs at bay. The grounds can also work as a repellent for ants and cats who wish to use your garden as a personal litter box.
There are also many creative double uses for items you might find in your bathroom or bedroom. Hairspray, when sprayed onto a child's artwork, can preserve it to keep it long-lasting, and will work especially well at sealing in chalk or pastel drawings. Suede clothing and shoes can be revived using an Emory Board. Running the board over a stain and then holding it above steam should remove the spot. Dental Floss is a strong alternative to thread when it comes to repairing a button or items such as tents, tarps, or backpacks.
One can even save money by being creative with the items they often throw away! Plastic Cups make great storage for childrens' craft supplies, such as paintbrushes, crayons or chalk. Old Newspapers can be used in combination with window cleaners to remove extra-tough streaks. Newspapers are absorbent, and can be crumpled into a wet shoe to dry overnight, or to be placed by a door as a spot for wet boots and shoes. Those same shoes can be kept smelling fresh by placing a Dryer Sheet inside. Dryer sheets also make excellent dusters, especially for tough spots such as fans or venetian blinds.
When it comes to re-using everyday items, the old adage has never been truer, another person's trash is indeed, another person's treasure! Read More»