Truth19

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  • American Express Calls Investment Banks' Bluff
    First of all, AMEX does offer both charge cards and credit cards. For those that don't know the difference, charge cards have to be paid off each month while credit cards don't.

    FXTrader, how can Visa and MA have lower net-worth clients than AXP when V's and MA's clients are banks?? Please explain.

    I am a AXP charge card holder and have a annual fee of $400. This still have not swayed me to give it up. The card is a more prestigious card and carries extra benefits.

    The big concern to me is when the Option ARM mortgage loans recalculate. The first problem is that these loans offer a low payment based on a 1%-2% interest rate. Howeverr the payment on this rate does not even cover the interest accruing on the loan at an actual rate of about 7.5% which can adjust each month. This loan is better known as a negative amortization loan.

    BUT the largest problem is the way banks recognize the income. Banks are allowed to recognize the full P&I payment based on the 7.5% rate even though they are getting paid on the 1%-2% rate. It is deferred income but still recognized. This is a bigger issue than any credit card issue out there.
    Jul 25 19:41 pm |Rating: 0 0 |Link to Comment |View article

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