Credit Card Use Is Surging, Risking Another Debt Crisis »
Posted by: engineer 3 months agoCash-strapped Americans are ringing up more and more purchases on their credit and debit cards, but there could be a steep price to pay ahead.
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engineer3 months ago
Though the trend is a boon for the companies that issue the cards, analysts worry that there could be long-term problems not only for consumers but for the anemic economy and the already-troubled banks that will be underwriting all that risky debt.
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Charlson3 months ago
But there are still those who can't wait to have something they can't afford yet and are not necessities. Those I have no symphathy for but those who have lost their jobs and are trying to pay their mortgage and feed and clothe their children are deserving of some help.
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saintetienne3 months ago
Yeah, we wouldn't want to find a job, or find a BETTER job, or cut back in other areas or put yourself on a budget or anything. Just keep popping out kids and charging everything. THERE'S a way to get ahead.
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GHOSTWHOWALKS3 months ago
That would only make a bad situation worse. I can understand but that is the worse choice anyone can make. There are better ways of doing things.
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CaptainLucid3 months ago
I would bet the majority are from Capitol 1. I laugh at the ones that want to charge an annual fee along with a stiff interest rate. The biggest joke is secured cards. You give them your money which they collect interest on. Furthermore they charge you interest and fees to use your own money.
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newbie04203 months ago
Ever seen Die Hard (the original)?
There's a scene where the bad guy calls McClane a "child of a bankrupt society" or something like that.
They've been saying it for years and maybe they're right, maybe they're wrong.
We've had two big "bubble bursts" under our last two Presidents.
The .com burst of Clinton and the housing burst under Bush. Neither did much of anything to prevent it but in a capatilistic free society I'm not sure what, if anything, could have been done.
People also seem to forget the years of economic growth that happened before these bursts.
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walden33 months ago
I did see Die Hard.
Yeah, I've been through ups and downs. I "feel" this one is different. In the past we could rely on manufacturing and services to pull us out. Not any more. In the past we could rely on cheap oil. Not any more. Then you look at the level of debt both personal and government, the over extending of our military overseas, the collapse of the dollar. I think we're in for some big changes.
What would happen if some catastrophe occurs in the Persian Gulf or the Gulf of Mexico and oil goes up to say $200 a barrel overnight? Imagine waking up in the morning to $7 or $8 a gallon gas. How about if China decides it needs some money and sells all of our bonds.
Yeah, I'm pretty gloomy about it.
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newbie04203 months ago
Yep, Im all about personal responsibility and since I know myself so well I know if I had a limit that high I would use my card more than i should.
I turn down offers and reject raises on my limits for this reason.
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Tangent0013 months ago
This is not at all surprising. Budgets for the majority of Americans have been tight for years yet wages have largely been stagnant. With oil through the roof and no ceiling in sight, everything costs more. People had been dipping into their savings to make up for their budget shortfalls. Now that savings rates are at their lowest since the Great Depression, I'm guessing that resource has been tapped out for many families, so they're turning to credit.
What astounds me is these reports follow one after the other yet there are many who have claimed for years the economy has done splendidly under Bush policies. While that may be true for the investor class, the rest of us poor saps are digging in the couch for loose change.
You shouldn't be too concerned. I'm sure Citi Group(TM) will get a nice bail-out package when the crap hits the fan. They're already far better protected against all those shiftless consumers 'claiming' bankruptcy.
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markmawn23 months ago
Capitalism now should be called Profitalism. It's non-shared profits with a socialistic bail out plan.
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CaptainLucid3 months ago
"What astounds me is these reports follow one after the other yet there are many who have claimed for years the economy has done splendidly under Bush policies. While that may be true for the investor class, the rest of us poor saps are digging in the couch for loose change."
I wonder what the economic reports would have looked like if Reagan, Bush one, and Barbara's little turd would look like if you subtracted the debt. The neocons love to throw a money party where the rich get really rich but when you wake up the place is trashed, they have fled town, and the bills are coming in.
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canadianrancher573 months ago
One of my neighbours runs a gas bar in our town and in the last little while he has said that alot more of the fuel purchases are being put on cards, people are just about maxxed out as far as cash flow goes even the ones who have decent budgets. when you look at all the increases that have happened in the last 6 months it's not hard to see what the problem is and contrary to what saintetienne thinks finding a better job is getting harder and if it involves a move or a longer commute you just might end up farther behind, although most of us do have some excess that could be trimmed.
As for credit cards I sort of like them, I used someone elses money for thirty days then write one cheque before the due date, the key is being responsible with your spending.
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markmawn23 months ago
Good observation. A credit card is a contract with a company who is essentially loaning you money. They are not good or bad, but neutral....but with fees.
The really big danger right now is the debtors for outnumber the debtees. If we all stopped paying, the entire system would collapse in on itself. This is not a good time for Citi Group to raise rates.
I'm going to pay my local Credit Union a visit this week.
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TheRealizer3 months ago
Your food comes to your market on credit cards, there is no way I could send a truck from the Central Valley in Cal. to Chicago or Indianapolis without cards. It would not be possible to send a shoe box of bills in the truck to buy fuel. If the credit system breaks down the food supply system goes down with it, I personally grow a garden and raise as much of my own food as possible.
I am not optomistic about the future of our once great nation..
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