Credit card reform may be looming in the headlines, but for now the fine print is still hitting consumers hard. Banks keep raising minimum payments, interest rates and fees, continuing the credit tightening that began last year, even as cardholders are falling further behind on their payments. The rate at which banks are writing off card debt as unpaid leaped to 10.6 percent in May, up more than 65 percent in a year and the highest rate since 1989, according to Moody’s Investors Services. “Clearly, households are under duress and are having trouble paying back their credit card balances,” said William Black of Moody’s.
Obama pushes GM asset sale
A senior member of President Barack Obama’s auto task force testified Wednesday that the U.S. government will not continue to fund General Motors Corp.’s operations if the automaker doesn’t get approval to sell its assets to a new company within the next 10 days. “We have no intention to further fund this company if the sale order is not entered by July 10,” Harry Wilson, one of the Treasury Department officials overseeing GM’s restructuring, said while being cross-examined by an attorney for a group of GM bondholders opposing the sale. The No. 1 U.S. automaker’s government-backed plan for a quick exit from Chapter 11 hinges on the sale plan, which would allow it to leave behind many of the costs and liabilities that have made the company unprofitable in the past.
McDonald’s to add a bigger burger
McDonald’s Corp. will begin selling a new line of bigger burgers priced at about $4 each on Thursday to bring in customers looking for a beefy alternative to pricier burgers at sit-down restaurants. The new Angus burgers are made with a third of a pound of Angus beef and come in three varieties — a deluxe burger with pickles and tomatoes, a mushroom swiss burger, and a bacon and cheese burger. The burgers will be sold in all U.S. locations for the next few months. The fast-food chain declined to specify when or if the burgers would become part of the company’s core menu, which includes favorites like the Big Mac.
Newspaper chain to cut 1,400 workers
Newspaper publisher Gannett Co. plans to cut 1,400 jobs in the next few weeks, about 3 percent of the work force, as it faces a prolonged slump in advertising revenue. Bob Dickey, head of the company’s U.S. community publishing division, informed staff of the layoffs in a letter Wednesday. He told employees that “there have been some promising signs of a recovery, but the reality is the improvements are not broad-based and the economy continues to be fragile.” The majority of layoffs will come by July 9, he said. The move follows a 10 percent cut at Gannett in 2008, which left the company with about 41,500 employees.
From Herald news services
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