Tax Reform in This Election Year: It's Not Likely
Which Credit Card Rewards Does the IRS Care About?Last week, CNNMoney wondered whether the subprime meltdown was bleeding into credit cards.
Now Reuters is also thinking that might be about to happen. Delinquencies have already started to creep up, and people are paying off less of their outstanding balances than they used to, but it could get a whole lot worse.
Many Americans have thousands of dollars available on as yet untapped lines of consumer credit. If unemployment rises -- and people have even more trouble paying mortgages and other expenses -- they could tap into credit cards just as they become very bad bets to pay back the money. Banks have been increasing consumer credit-related write-offs in recent months but it could get worse.
It's too early to tell what will happen, and many experts don't think we will see a crisis in credit cards. With new bankruptcy losses make it almost impossible to get rid of credit card debt that way, there may be a powerful motivator for consumers not to let it get out of hand.
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