With consumer credit tightening this year in the fallout from subprime mortgage meltdown, are more Americans falling behind on their credit card payments? Yes they are, as the "cash machine" mentality many consumers isn't jiving with the "must make minimum payment" moniker those crazy pieces of plastic come with.
Did you know that a $6,000 credit card balance with a revolving credit line can run a minimum payment of about $200 per month? Quite a bit, isn't it? And that's below the average credit card debt load in this country. With less access to cash, cost of living increases and goofy financial decisions, those credit card payments are becoming a lower priority of borrowers. After all, that's what credit is -- borrowing. Did you just charge that flat-panel TV? You're actually borrowing it from your credit card company in a manner of speaking. Nice, eh?
The Associated Press report also said that the largest increase in past-due credit card payments were those that were 90 days in arrears already. If you think the mortgage loan default and term reset problem was bad in 2007, it will only continue into 2008. Perhaps the serial borrowing American will learn a hard financial lesson this year. And then, perhaps they can get back to paying those credit card payments on time and in good fashion.
Unpaid credit cards increasing at alarming rates
Posted Dec 26th 2007 5:48PM by Brian White
Filed under: Bad news, Consumer experience, Personal finance
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Reader Comments (Page 1 of 1)
12-26-2007 @ 6:14PM
Dan Barnett said...
But Mr. White, what happens to the economy when the US consumer quits buying in order to pay down the credit card debt?
12-26-2007 @ 6:41PM
Brian said...
The economy will correct itself however it does. So what? Recession -- bring it on....
12-26-2007 @ 7:00PM
Dan Barnett said...
As I remember President Bush came to regret using the term, "Bring it on".
7-09-2009 @ 12:21PM
Alessandro Machi said...
If you only pay the monthly minimum charge your interest rate is actually 4 to 5 times greater than what you think it is. If you use a 20% interest credit card and only make the minimum payment every month your actual interest rate is 80% to 100%.
Credit Card Billing statements should show what the actual interest payment is based on what you are willing to pay each month, but they don't do that. This lack of real interest disclosure has misled credit card customers into way more debt that can't be erased because the interest rates are so high to begin with.
I have started two protest websites http://www.credit-card-cap.com and http://www.credit-protector.com that identify, explain and then offer solutions to the current credit card debt.