In this country, if you don't have debt, you're a loser. It used to be that way, anyway. Something that was antinomical to my European, investment banker background. Yet, it looks like the U.S. is getting a reality check. Thought that the subprime and real estate debacles were the Armageddon of the U.S. economy? Think twice. How about credit card debt? As this week's LA City Beat reports, über-plastic turns out to be just another house of cards:
- Credit card debt in the U.S. is fast approaching 1 trillion -- with many people using pricey cash from their credit card to finance their mortgage and other debts.
- Last year, U.S consumers added $68 billion against their credit card lines.
- Just as with mortgage debt, credit card debt is put into pools that are then resold to investment houses, other banks and institutional investors.
The credit card industry (Visa, MasterCard, American Express, etc.) and the 10 banks that dominate the industry as the primary card issuers spend an estimated $2 billion a year in endless marketing worldwide. We are all bombarded with their solicitations and sales tie-ins and gimmicks...whether we're credit-worthy or not.Maybe this country should turn this whole nonsense on its head -- and value customers who have more savings than debt. Is it too much to ask? Too early maybe, but definitely not too much. Wake up America: the days of living beyond your means are long gone.
