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Banks Might Pay Dearly For Issuing Long Credit Lines

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The Tampa Tribune

Published: January 15, 2008

For the past few years, banks that issue credit cards have aggressively wooed affluent customers with lavish perks and fat credit lines. Now, that high-end strategy is coming back to bite the banks: There are growing signs some of those consumers are having a hard time paying their bills.

It is the latest in a series of woes for U.S. financial institutions, which are struggling to contain a series of credit-related problems after years of strong profits. Banks have lost billions of dollars from soured home loans and mortgage-related investments. And defaults on commercial and industrial loans could rise later this year if the economy weakens further.

Business, Page 3

•Investors and analysts will get an in-depth look at the credit card problem this week when Citigroup Inc. and J.P. Morgan Chase & Co., two of the biggest U.S. issuers of plastic, report fourth-quarter results.

•Both are expected to set aside hundreds of millions of dollars to cover mounting losses on credit cards and other consumer loans.

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