Is credit card crisis next?
However, a credit card crisis would impact companies that haven't been so directly impacted by the mortgage mess. As with mortgages, credit card debt has been packaged as sold to investors. It was a way for banks to reduce risk.
Despite interest rate cuts, credit card interest rates and penalties have skyrocketed recently. Part of this is to cover increasing credit card default rates and part to raise cash in a tight credit market. The average US household now owes $10,678 in credit card debt, up 29% from 2000.
Why banks are boosting credit card interest rates
USA Today -
By Kathy Chu and Byron Acohido, USA TODAY Tommy Newsom was shocked when his bank nearly doubled his credit card interest rate this year, to 27%, ...
Credit cards versus loans
Credit card crunchtime Debt-ridden consumers rethink personal ...
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PM's Credit Card Concern
Sky News, UK -
Gordon Brown says the Government is concerned about rising rates of interest on credit cards. Will Brown let slip his tax-cutting plans? ...
UPDATE: UK To Set Out Plans To Monitor Bank Lending To SMEs