How Can HSBC Credit Card Survive

Last year, HSBC earned profits amounting to $12 billion. Despite this, it also lost up to $9 billion due to unsettled loans and credit. Basically, great blame of this financial standing was given to the US mortgage dilemma. They have contributed much of this crisis. This is why all of the US banking institutions including this one have resisted the credit bill.

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This bank that was once known to be a giant bank admitted its wrong turn in the past. To trace it all out, the acquisition of Household about 6 years ago made a lot of contribution to this major drop of its status. First few years was like a fairytale for the bank since US was with them. But eventually, when the bank had a super bad debt mishaps came along and most of its operations in the country was affected greatly and it came to an end.

Frankly, the American credit card companies are faced with great trials. First and foremost is that they are shouldering the bad debts today, not only that, this can get worse by ?7 billion in the next few months. Despite all this, there is one bank that is willing to continue running, the HSBC company. If HSBC would still continue to operate, according to Knight Vinke, one of HSBC’s shareholders, it basically will not succeed and it is better to stop its operations in the country. It can put the bank in a much worse situation gaining more debts and not being able to save whatever that is left of it if they would insist to still run all operations.

Basically banks like HSBC are on restraint right now since the credit card bill puts all the stops to previous practices that worked for card issuers’ favor in the past in order to protect the rights of consumers from common bank abuses like sky-high interest rates. The HSBC is currently making a lot of efforts in order to save its operations in the US country. In addition to this, they must also follow the policies stated in the bill strictly.

Will HSBC be able to endure this battle against the American credit card market today? Is it still practical to say that the credit card bill can still pull the last straw to HSBC in the US? HSBC can answer all these queries and this will basically depend on its next step to take. This time is a crucial time for the bank since whatever their decision will be, it can make or break them.

HSBC today is in great crisis basically due to the skyrocketing bad debt in the US. And because the company has a very poor performance in its credit line it also followed that the profit standing is not good. The bank needs to have about $6 billion dollars or $4 billion dollars of money so that they can come back again and survive from the crisis.

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