For years, it has bugged me that there seems to be no political will to set up rules that would keep people from getting in over their heads on credit card debt, or that would prevent financial institutions from charging them usurious interest rates once they got there. Perhaps we’re now reaching some tipping point after which there will be momentum to provide some basic boundaries for this business.
Business Week, in an article called “The Subprime mess, now in plastic?” offers some chilling evidence about the rapid growth of revolving credit. From September of 2006 to September of 2007, according to the Federal Reserve, revolving credit card debt will go from roughly $860 billion to about $925 billion – and that’s all money that is being ‘loaned’ to consumers are horrifically high interest rates.
To read the article click here.
I wonder who the geniuses are that will figure out how to make an opportunity out of this mess.