Saturday, November 20, 2004

While we're on the subject of the American saver (the term is laughable on its face!), ponder a bit of data form an article on credit card debt from today's New York Times.
the credit card business . . . is now the most lucrative segment of banking. [Revolvers, or those who roll balances over from month to month, never paying in full] make up the profitable majority [59%] of the 144 million Americans who have general-purpose credit cards. . . .

. . . regulators and lawmakers have been reluctant to crack down on a popular consumer product that fuels America's economic engine. Consumer spending pulled the country through the last economic downturn, powered largely by purchases financed with debt, to the tune of $2 trillion.

. . . The typical household has eight cards with $7,500 on them. . . .
Of course, since we know that 41% (59 million) of American credit card holders carry no revolving debt, that means the 59% who do (85 million) are carrying a lot more than $7500 per household.

Credit card companies are raising their interest rates through the roof, some well into the 20s%. Sixty percent of American consumers are going to start hitting brick walls soon; those 4.1% one-year adjustable-rate mortgages should come in mighty handy. Maybe Greenspan can convince the 40% of Americans without revolving credit card debt to start racking up the bills, too?


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