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The Next Shoe to Fall

November 13, 2008

Analysis of:Credit card firms attacked for hiking rates to 17% | www.timesonline.co.uk

What's next ? How about a credit card meltdown. With many people carrying $15,000 - $20,000 of revolving debt on multiple credit cards, it is now time to pay the piper. What seemed easy with low interest rates of 3%-4%, or with " teaser rates" of 0%, have now become a $3,400 a year expense, without paying the principle down by one dollar. Add to that higher minimum monthly payments, the risk of missing a payment with it's fee's, and more importantly, the risk of universal default. Will Hank Paulson bail out the plastic brigade with twenty or thirty billion to tide them over till better days? If not, we risk a disaster of magnanimous proportions for the working lower middle class who borrowed to finance an upwardly mobile life style they could not otherwise afford.

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