Credit card company bailout next?

Earlier today I wrote an article on WalletPop.com about the ever-growing bailouts being handed out by the federal government. Specifically, I’m a little ticked off by the AIG bailout, which was at $85 million about a month ago, and now sits at $150 billion. (Yes, that’s almost double.)

I suggested that the insurance industry and credit card companies would soon be asking for bailouts of their own.

But news late this afternoon may mean that the credit card companies don’t have to ask for bailouts after all! All they have to do is pretend to be banks! The Wall Street Journal reports that American Express (yes, the credit card company) has gotten approval from the Federal Reserve to become a bank holding company. That means they have immediate access to the $700 billion TARP (bailout) program.

Last week AmEx reported quarterly profits were down, and they were trimming about 10% of their employees (7,000 of them). The company also reported a $1.4 billion charge for credit losses, with larger charges expected in the next two quarters.

Plan on seeing Visa, MasterCard, and Discover asking to be pretend banks too. They’d be fools not to try it and have a chance at getting their hands on some federal money.

5 thoughts on “Credit card company bailout next?”

  1. Wellllllllll….here is the another greedy and destructive company that is helping to destroy us all! There are a number of people here in Gainesville, Florida that is getting mail for our DEAD RELATIVES from
    1st Credit Union of Gainesville (www.1stcu.com)informing them of $$$$ they can receive! I kept my brochure they sent to my grandmother that has been dead for 10 + years and another person was talking about it at the gym that her son-in-law received the same info for his dead mother that she can get $6,000.00 dollars. I made a copy, wrote them back and informed them that she is dead, (like they don’t know). Can you imagine the car industry bringing up the dead serial numbers of vehicles that’s sitting in recycling plants?

  2. Discover Card has been a bank for at least two years already. They acquired Greenwood trust bank out of Delaware & have been operating under Discover Bank since.

  3. Now is the time for all of us who have been responsible with our spending and have good credit to cut up our cards and pay every thing in cash or checks. Let the irresponsible and the greedy be accountable for their own actions!

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