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Credit Cards: The Next Debacle
WSJ
Meredith Whitney
Few doubt the importance of consumer spending to the U.S. economy and its multiplier effect on the global economy, but what is underappreciated is the role of credit-card availability in that spending. Currently, there is roughly $5 trillion in credit-card lines outstanding in the U.S., and a little more than $800 billion is currently drawn upon. While those numbers look small relative to total mortgage debt of over $10.5 trillion, credit-card debt is revolving and accordingly being paid off and drawn down over and over, creating a critical role in commerce in America.
Just six months ago, I estimated that…
THE POWER OF THE CHINESE CREDIT CARD
If you think that lack of financing is the only thing holding China back from consuming, consuming, consuming like we Westerners do, then prepare for a shock, as from atimes.com we get the report that “China’s Shoppers Stock Up On Cards” by Catherine Jiang.
She writes, “Chinese consumers, until now recognized as among the world’s most determined savers, are adding credit cards to their wallets in record numbers, with the number of such cards in circulation almost doubled in the first quarter from a year earlier.”
I am looking at my calculator and wondering if I want to spend the rest of…
22Jul2008 | Daily Reckoning | Comments Off | ContinuedThe Nation’s Debt: Collectors are in for rough times
There is no denying when it comes to soaring fuel prices, this nation has a major problem on its hands. Thanks to credit cards, the problem may be exponentially larger than most folks think.
Look at it this way. For the vast majority of us, a stop at the pumps is pretty simple. We swipe our credit card and squeeze. We are $40 poorer, but we never shell out any cash. That pain comes in a few weeks when the credit card statement arrives.
It may not appear to be a major problem for those of us that pay our…
24Apr2008 | Guest Contributor | Comments Off | Continued
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