Some Facts About Credit Cards
June 27, 2008
1. Consumer debt is nearing 2 trillion dollars. How much can the American consumer handle?
2. Household debt grew 10.4 percent in 2003 while savings dropped 38 percent.
3. Even with interest rates at an all time low many credit card issuers still charge 18-29% interest. Although many accounts are set up at a low interest rate, one late payment can often trigger a drastic increase in the interest rate.
4. The amount of fees charges by credit card issuers has grown fourfold since 1996 from $1.7 billion dollars to 7.3 billion. Fees charged by credit card issuers include late fees, over limit fees, and balance transfer fees.
5. Credit card issuers mailed out over 3.2 billion credit card applications in 2003.
6. Personal bankruptcies are expected to hit 1.6 million in 2003, double what they were in 1990.
7. Personal bankruptcies are growing at the rate of 7% per year and at that rate a national crisis is inevitable.
8. Americans have an average of 13.5 credit cards per household with credit card debt per household exceeding $9,000. Many consumers, however, have credit card debt exceeding $50,000 and some as high as $250,000.
9. In a recent survey of 5,000 consumers conducted by Consolidated Credit counseling services 43 percent stated they had a debt-to-income ratio of 50 percent or more. Nearly two thirds (63%) said their debt load was making their life miserable.
10. Teenagers and college students are a prime target of credit card issuers even though they most often do not have a job or income.
11. Persons just coming out of bankruptcy are prime targets of credit card issuers as they have little debt and can’t file a chapter 7 bankruptcy again for six years.
12. Small businesses are increasingly lured into using credit cards and unsecured lines of credit to fund their businesses. Unfortunately, this type of quick and easy financing is expensive and may eventually overburden the small business.
13. The mini-storage business, where Americans store all these things they purchased on credit and really didn’t need, has increased fortyfold since 1960. There are now 30,000 of these facilities in the U.S. charging over 12 billion dollars in fees.
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