Cable News Clips

So how can I make that claim? In the late 80s and early 90s, my company trained credit card collectors for several of the biggest issuers, including Citibank. We were a very small company that specialized in communication skills, so we we weren't called until the companies had tried everything else.

I researched the companies' collections methods and found that the biggest problem was that the collectors had been trained to make "demand statements" ( ie., "We need you to pay $500 by tomorrow&quot and to assume the customer was always lying. So we trained the folks in how to be treat the customers as human beings, ask open ended questions, listen to the answers, and use win-win negotiating techniques. Voila! They all saw their default rates cut in half or more. So when I say that anything over 5% default levels freaks out the execs, I have some real background to say it.

Has anything changed since then? I don't know for sure, but considering the fact that whenever I charge a major purchase that brings my balance to over $2,000 instead of around $1,000, my credit rating takes a 20 point hit that doesn't fully recover for months. And I pay off my full balance due every month. The credit rating agencies basically act in tandem with the credit card companies. That leads me to believe that the credit card companies probably start to cut off credit to past-due customers even more quickly than they used to do.

The 13% figure means that most of the customers in default (generally multiple company's cards) can't make even the minimum monthly payment for a number of months. That number used to be between 3 and 4 months, with any remaining available credit suspended at 2 months past due. At the 3-4 month mark (depending on the company) the account was cancelled permanently and sent either to the company's recovery department or straight to a collections agency. I suspect that the time allowed for the customer to bring their account up to date is even less today than it was at the time.

The idea that 13% of US credit card accounts aren't just past due, but in default is horrifying. The fact that this really isn't reflected in the national economic numbers is worse.

Meanwhile, how much of the economy is now invested in AI companies and the data centers and oil companies they need to exist?