Credit Card Debt Problems

The credit card debt problems are rampant in the United States more than most other countries in the world. Americans grow up with the idea that it is ok to go into debt. While people in other countries grow up learning about how to use cash instead of credit, commercials in the US have been preaching to people here for a very long time about how to spend other people's money using credit cards. When the economy is good, there is no problem, however when the economy is slow and prices of gas and food are rising nationwide, the credit card debt problems are more severe.

As the housing market deteriorates and prices of consumer products are up, people are finding it harder and harder to pay their credit card debts creating larger credit card debt problems as people are falling behind on their credit card payments and even mortgage payments as well as car payments and so forth. Delinquency and default rates surge by double digit percentages in both 2006 and 2007. Analysts and economists are predicting that with the wavering subprime mortgage crisis, the worse is yet to come.

Where are the biggest credit card debt problems?

The biggest credit card debt problems seem to be in credit card accounts of more than 90 days in arrears.

Relationship between credit card debt problems and mortgage payment problems

Usually when the economy is at risk, you will see problems first in the mortgage industry with people not being able to pay their mortgage payments and defaulting leading to a rise in the rate of foreclosure. Then the credit card debt problems follow before other debt areas are hit.

Credit card debt problems statistics

In 2007, the value of credit card accounts at least 30 days late rose 26% to $17.3 billion in October year on year from October 2006.

Credit card debt problems & defaults

When the Credit card debt problems get so bad, lenders could potentially write off the debt when there is no chance that the debt will be paid.

The default rate rising from the Credit card debt problems rose 18% to almost $961 million in October 2007 according to filings made by the trusts with the Securities and Exchange Commission (SEC).

Serious delinquencies also rise sharply. Some of the US' biggest lenders such as Advanta, GE Money Bank and HSBC reported that the value of accounts that were at least 90 days delinquent rose 50% or more year on year.

With all the credit card debt problems at hand, the credit card companies are still profiting nicely from down in luck Americans slapping them with more fees, late fees, penalties and high interest rates. The subprime crisis has already brought the United State government to play its part in bailing out troubled banks. Economists predict that the credit card debt problems will get worse after the holiday season where people are spending the money they don't have or cannot afford.