Article: Credit card debt is like that proverbial snowball that keeps getting bigger and bigger and card issuers couldn’t be happier
Credit Cards
Credit card debt is like that proverbial snowball that keeps getting bigger and bigger and card issuers couldn’t be happier. The credit card industry wants to see credit cards charged to the limit (or over the limit so the higher rates can take effect), minimum payments made so that the card virtually never gets paid off, and the use of convenience checks/cash advances so that they can charge interest immediately to your account.
And if your past credit history has been, well, not so good—they will still give you a card with an annual fee, high interest, and all sorts of other fees that they just give creative names to. Let’s call a spade a spade and see the credit card industry for what they really are—money hungry.
The State of the Consumer Address
The table below is a marker of desperation as more and more consumers are opting to use home equity as a means to get out from under the weight of credit card debt. “A survey by the Consumer Bankers Association found that, whereas in 1991 home improvement was the primary reason for taking out a home equity loan, debt consolidation is now the primary reason, with 40 percent of borrowers using a home equity loan for this purpose in 1997. This shift also is evidenced by another recent survey by Brittain Associates, Inc., which estimated that during a 24-month period ending June 1998, 4.2 million households converted $26 billion in credit card debt to home equity mortgage debt.” See High Loan-to-Value Lending: A New Frontier in Home Equity Lending
According to the Federal Reserve Statistical Release the figures for May 2004 in revolving and non-revolving consumer debt shows 2031.2 in billions of dollars. Consumer debt is out of control as Americans are constantly being enticed to spend money above and beyond the means to pay it back. This trend (charge now and pay later) has a direct correlation to the record number of bankruptcies being filed today. Too many times unforeseen events such as downsizing or personal illness and accidents leave families devastated in the wake of large credit card debts. To exasperate the growing problem of credit card debt you might want to throw in the added concern over identity theft
