每日时讯英文阅读：Credit crisis now hits the well-off

Ruru's elder sister lives in USA, and she'd faced a big problem now, the bank which she got her mortgage loan wanted to raise prime rate about 200 bps. That's the situation faced by US bourgeoisie, and would it be a real winter?

Credit crisis now hits the well-off

By Francesco Guerrera and Saskia Scholtes in New York

Tuesday, July 29, 2008

The US financial crisis is spreading from subprime borrowers to wealthier consumers, with evidence mounting that more affluent people are failing to pay their mortgages and credit card balances.

Growing concerns over the financial health of richer borrowers are prompting banks and card issuers to tighten lending practices further in moves that could further dampen consumer confidence and spending.

Banks such as JPMorgan Chase and credit card groups such as American Express have clamped down on lending to customers that have traditionally been regarded among the safest and most profitable borrowers.

“The crisis is just starting to spread beyond the middle class,” said Curtis Arnold, founder of CardRatings.com. “Even folks with good credit-ratings scores are no longer immune from adverse actions from their card issuers.”

Senior bankers say that after the subprime debacle, the worsening outlook of “prime” portfolios shows the crisis is far from over and could inflict substantial losses on financial institutions.

The spreading of the credit crunch to wealthier consumers could hit financial groups, such as JPMorgan and American Express that have so far avoided the worst of the crisis because of their relatively low exposure to subprime customers.

Second quarter results from financial companies showed rising losses on mortgages and credit cards issued to prime customers as soaring gas prices, the slowing economy and depressed house values took their toll.

Jamie Dimon, JPMorgan's chairman and chief executive, recently told Wall Street analysts that the outlook for prime mortgages was “terrible” and the rate of delinquencies could double or treble from current levels of around 4 per cent.