In this crisis these days when newer records are being set on the stock exchanges for the drops, here is another sobering thought. We have all talked about the Mortgage crisis from the debt to the consumers. But nobody seems to have started discussing the Credit Card debt. Getting into debt of any kind is never easy, especially if people find themselves in a financially difficult situation. It’s not just young people though that debt can affect. It is said that even those in retirement can’t resist a credit card. No one is restricting anyone from owning a credit card, but it is about being sensible with what it is being used for and keeping up with the monthly repayments.
Apparently, it may not be that big but it is fairly significant! At least for the mortgage debt the lender can repossess the home, for Credit card – what do you take away? The figures below give information on the different types of debts in the US.
Consumer and Individual Debt
Purchases and cash advances on major credit cards in just the last year by consumers in the US = $2.2 trillion
Growth in overall credit card debt between 1989 and 2006 = 315%.
Mortgage Debt – $14 trillion in 2008
– fewer people are paying their credit cards on time.
– Average credit card debt rates = 14.5%
US Government debt figures
– U.S. federal debt passed the $10 trillion mark
– After adding unfunded Medicaid, Social Security, Medicare, and similar obligations, this figure rises to a total of $59.1 trillion, or $516,348 per household
Public debt = 36.9 percent of GDP
Total debt = 65.5 percent of GDP