When Is the Credit Card Bubble Going to Burst?

In case you didn’t already know, the country’s largest bubble is about to burst. Credit card debt variations continue to rise month after month, finally surpassing the $900 billion threshold last June for the first time.

According to the Federal Reserve, Americans have accrued $ 39 billion in new credit card debt this year. The impending disaster is referred described as a credit card tsunami. You’d best slam the doors!

In August 2007, buyers in the United States added an additional $ 6.2 billion to fresh debt, on top of the $ 5.6 billion obtained in July. Americans owe over R2.5 TRILLION DOLLAR in debt, including everything except rented homes!

Now that the mortgage game has over and all of the easy money has been made, the next big thing is for banks to milk high growth and profit from credit cards.

Fees and penalties, as well as intermediate interest rates, have continuously risen throughout the years. Last year, banks made interest rates of over $ 100 Billion and another $ 50 Billion in Payments and Penalties; these guys are not your friends.

Many people, overburdened by the housing boom, are increasingly reliant on credit cards for subsistence. As the faucet to household income dries up and their lifestyles remain unchanged, or events such as job loss or medical troubles force them to continue to rely on billing cards, it is impossible to ignore how much further debt John Q. The community will accept. The dam must eventually fail, and many people will drown.

Who knows how many people lived past their means just a few years ago, extracting transitory money from their property in order to spend it on lavish things like vacations and weddings in Tuscany?

How many people have switched an unsecured credit card, charged a card in their true location, and faced foreclosure if a few payments were missed? What about the folks who once believed that the value of a house that had already been priced would continue to climb, and they would withdraw tea-level loans, hoping to reap a profit in a few years, only to find themselves trapped in a double loan with no way out?

Now that the game is done, those players must rely on their cards to survive. People who are “trapped” in teaser rate debts are now unable to make “real” mortgage payments.

Many people make the mistake of borrowing money and keeping credit card information. Some utilise them as ATMs, increasing them till they hit their limit and applying for additional cards that adorn their mailbox.

They are living in a fantasy world when they believe that missing home payments will not affect their debt.

Give it a month or three, and when the credit cards realise you’ve lost a home loan, raise your interest rate to 25% or higher, and please forgive my French, “screwed.” The majority of your payments will be wrecked by interest, and it might take 10 to 100 years to repay the debt.

Card firms understand that consumers will go to great lengths to keep their cards updated and that people require cash. According to a Fed study, credit card requirements are as low as 10 years; if you suffer a heart attack, you can get a credit card. Pets are even given credit cards.

Junk mail credit card applications that excite your mailbox are delivered to the post office by small vehicles filled with forklifts.

Although mail sellers are less than what was sent at the greatest rate in 2005, the percentage of people who react and credit card firms accept has improved continuously and has increased threefold since 2005!

All of this is due to the completion of the equity settlement in your house at a greater valuation. It never stabilised, and I feel sad for the folks who paid $ 600,000 for a 40-year-old house that didn’t have a quarter of that price. To believe that a bubble could continue to inflate and that the average price of a house is above the typical person’s ability to buy one was a foregone conclusion, and it has already occurred.

Now, I spend my days talking to folks who use credit cards to exist or pay for their accommodation; this will come to an end at some point.

The next bubble to burst will be the credit card bubble. You should take action if your credit card debt is out of hand.

With a debt repayment procedure, there are methods to repay your creditors with less than the amount you owe, within 3-4 years, which will leave you qualified for new finance once it has expired

. Read our free Debt Payment Report to see if you can pick one.