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Credit card use doubled in January
By Anita |
Here’s an alarming statistic: Americans spent twice as much on their credit cards in January 2008 as they did the month previous.
Thanks to the subprime mortgage crisis, people that were using home equity lines of credit are now turning to credit cards.
According to Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, “There’s not much gas left in the tank. In the early stage of a recession, consumers tend to rely on credit cards to see them through the hard times.”
Household debt has been increasing right along with the national debt. How much longer is this sustainable?
It would seem that our American lifestyle, based on consumerism and individualism, will make it more difficult to endure this current recession.
What do you think?
Is the future so bright that it’s hurting your eyes?
Or are you worried?
At the very least it’s a good opportunity to take stock of your financial situation. I don’t know about you, but in my case, I can get seduced into a state of denial when dealing with finances. The denial then turns into guilt when I screw up and make a mistake.
Guilt and denial ultimately leave me paralyzed. The best way for me to keep denial at arm’s length is to use real cash for my store purchases. And to regularly update our spending plan and look at the numbers and memorize them.
Deb and I are just normal moms who try to figure out how deal with debt and finances in the midst of raising children. In the midst of dealing with kids, working from home and dealing with our bills we’ve spent time during the last several months finding some cool tools that we’d like to share with you. We’ll have more to say about that on Friday so stay tuned.
Speaking of working from home, my two youngest kids are wrestling on my bed beside me as I sit in my corner office (i.e. desk in bedroom corner). So I’ll sign off now. Feel free to discuss the aforementioned alarming statistic in the comments and share your thoughts.
Topics: Credit Cards |
March 28th, 2008 at 6:38 pm
hey Anita
I pay cash for everything–because I have to! I am in a debt paying program where I’m negotiating to pay half of what I owe and have the rest forgiven. On the downside, I’ve had my credit frozen until I pay everything off…but on the upside…it’s great not to be accumulating more debt (largely through interest).
The experience really opened my eyes to my own behavior (which wasn’t outrageous, but wasn’t exactly realistic either). And it’s opened my eyes to how the credit card companies want all of us to be debt so they can make a profit. Unless we are awake we are susceptible to clever marketing and offers…
March 29th, 2008 at 6:31 pm
Hey Suzanne,
Frozen credit sounds like a relief, although I’m sure it was stressful having to negotiate with the creditors.
I’ve really had my eyes opened too in regards to how creditors prey on us. The documentary Maxed Out (available on Netflix) goes into a lot of detail about that.
–Anita