The Credit Card Ballon Will Pop and It's Going to Hurt!

Have you heard these before: “Put it on the plastic. “ “Bang my card” or just “charge it”

We have all heard and used these terms before. We all have credit card debt and we are tied to it as a part of our life's daily spending. This is true and we're happy with the card until it comes time to pay the bill. The other unfortunate truth is that our society enables us to live a life of material possession even if we don’t have the money to afford it. We live beyond our financial means and its our consumer credit cards that make it easy to do so, but at what cost?

Everyone is paying attention to the dwindling house market, but people are not paying attention to the next wave about to hit our weakened economy. The credit card tsunami is heading right toward us. In Combination with the massive mortgage losses, a credit card Armageddon has the possibility of taking out our entire economic system.

Consumer Credit Cards are an unseen but major player in the these uncertain fiscal times. The mortgage lender and credit card companies lust, compounded with deregulation by all sides of government policy and the Bush administration, has taken us to a level which is close to that of the stock market crash and Great Depression.

Home equity and credit card balances have gone hand in hand for a while. Homeowners can’t use their house as a piggy bank like they once did. Equity used to be used to pay off credit card debt. Now there is very little or no equity for the average homeowner. Homeowners cashed in $1.2 trillion from their home equity from 2002 to 2007 to pay down credit card debt and to cover other costs of living, according to public policy research organization Demos.

Clearly there needs to be better regulations by both the government and lenders. Simply the biggest problem is in fact the average “Joe or Jane” consumer who spends more then what they bring home.



This review covers a recent article by Danny Schechter