Dec
08

Credit Card

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Credit Card

The U.S. under Obama is just around the corner in regards to the recession. But a factor which had contributed to some existing recession and The financial crisis is that of credit card debt in the U.S.. In terms of numbers of credit cards in circulation are more than $ 1.5 million for a population of just over $ 300 million. This is a menacing proportion and result in credit card debt of over $ 600 million. To this figure if we add the nearly million bankruptcies in the United States than we can get an idea of how much they affected the U.S. economy.

America is currently the world's largest economy, but in the near future China may well have on it. But unlike China in 60 million U.S. households pay no their full outstanding balances. This crawl and is classified as unsecured debt. This debt because of low clearance that 2.4% of the slope has resulted in a large economic problem that results in a large responsibility to a lot of people.

The reason for this debt is not difficult to find and has its genesis in the easy availability of credit and second, the ease with which gambling network with credit cards may be affected. At a conservative estimate of nearly 3 million Americans may be addicted to gambling. Note that the cumulative U.S. national debt is around 5. 7 billion. This is overcome by debt total consumption of $ 6.5 billion and one can imagine what this means. In fact, explains a very difficult financial situation neighbors in a disaster.

The situation is aggravated with extremely low savings rate of the U.S. population is now almost zero. In one case, compared to the savings rate in the eighties, when he was around 8.5% then the magnitude of the problem can be understood.

The period of the late 90s of last century saw huge prosperity for the people. But it was also the period in which debt grew because of the easy availability of credit. Thus, in the period 1989-2001 due almost tripled from 238 billion U.S. dollars to 692 million. The savings rate fell and bankruptcies rose by 125%

This massive debt credit card has had a negative effect on the economy. In addition to mounting mortgage and consumer debt is crippling the proposed budget most households. Bankruptcy has been set at large as Lehman Brothers and GM. Deregulation of banking has also taken its toll as the real cost of credit businesses (prime rate) has increased only marginally (2.5% -3.0%) but the actual cost of the consumer credit card debt has doubled from less than 6% to over 11%. Revolving credit card debt the next cycle amounts to about $ 11,000 per household.

In short, as are things the U.S. economy can be immense in the coming years, buckle down if the credit card debt is not stopped in

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