Credit card debt - is that the next subprime debacle?

The bad financial news isn’t over on a national scale. On an individual basis, we advise clients to clean up their credit card debt. Credit card debt is a wealth killer as it saps real money from a borrower and it does so quietly when one only pays the minimum each month. At an interest rate of 18%, a credit card balance will double in 4 years.

U.S. Credit Card Debt Seen As Next Nightmare
2007-11-07 06:44am
Americans now owe nearly as much on their credit cards as the estimated $1 trillion subprime loan debt that has sapped the housing industry and put a squeeze on the U.S. economy.

Newsmax.com reported Wednesday now owe a record $915 billion on their credit cards alone. Worse, defaults and delinquencies in the credit card industry are beginning to mount.

Credit card companies wrote off 4.58 percent in payments between January and May, almost a third more than in the same period in 2006, according to Moody’s Investors Service.

As a result of that action lenders like Citigroup, Bank of America, American Express and others already in trouble from the subprime mortgage collapse are being further weakened.

The U.S. economy itself is in danger as well, since it depends on consumer credit spending. Seventy-two percent of the U.S. economy rides on consumption alone.

With oil and gas prices up and the U.S. dollar falling, some analysts see economic disaster looming on the horizon, Newsmax.com reported.