Are you ready for the Credit Card Bubble Burst?
Guest Bloggers January 7th, 2009
The mortgage bubble has burst. Housing prices have plummeted, bank after bank has been bailed out, and the economy is in chaos. If you don’t have stellar credit, there’s almost no way you can get a mortgage. Those who used their house for equity are in ruins. Yet there is another bubble that is about to burst - the credit card bubble.
Most Americans carry at least one credit card, and many have more than one. Many cardholders carry a balance, paying interest anywhere from 0 to 30% on these balances. As the economy has weakened, more and more credit card holders are facing difficulty paying their bill, and this in turn affects the credit card companies. American Express, for example, announced cuts in credit lines for over 50% of its customers in the past few months.
Sooner or later, this bubble of debt carried on credit cards will pop. More and more people will not be able to meet their obligations, and credit card companies will write off more and more accounts. It’s quite possible that we’ll see another large scale bailout of credit companies.
So what should you do as a credit card holder? Practice fiscal responsibility: start paying off your balances, lower your interest payments by consolidating lines, and make sure you have enough cash to get you through the month. It may be sooner than you think that you can’t use a credit card to pay bills anymore!
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This post was submitted by Maya Richard. When she’s not fretting over the current economic situation, she writes about broadband, computers, software and high speed internet for Cable Modem Help.
March 7th, 2009 at 8:34 pm
Bail yourself out. Don’t pay em.
Don’t let Washington get away with it. They bailed out banks, but your still in servitude.