Along with not being able to pay the mortgage, more and more Americans are falling behind on their credit card payments.
According to an Associated Press report, defaults and delinquencies are surging, with the largest increase among accounts 90 days or more past due. And when you get that far past due, interest rates can soar from that low introductory rate to loan shark like rates of 25 percent or more annual interest.
This should come as no big surprise as we are told to shop until we drop as the economy depends on us spending like there is no tomorrow instead of saving for a rainy - or snowy - day.
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OK, I know there are many Americans who are 'buying beyond their means.' But at the same time, the critics should look at the changing relationships between incomes and the costs of important items like housing, transportation, and health care. Much has been written about how income hasn't kept up with housing costs and has deteriorated especially since around 1970. Most employees don't, by themselves, have the bargaining power to obtain enough income to establish a decent financial situation. Go after the corporate bigwigs who exacerbate the concentration of income while exporting good manufacturing jobs.
The banks, mortgage lenders and other sources of consumer funding are directly responsible for allowing the current mortgage crisis to deepen that is plaguing our country today. They were not satisfied with having only one form of interest but had to concoct other forms of extraction such as the notorious option arm featuring negative amortization which devises more than one way to squeeze additional interest from the backs of our working families; notwithstanding the hidden fees and late payment penalties. Now that these institutions have a backlog of inventory, they are crying wolf. Sugar coating the situation by saying that consumers are responsible because they did not read the fine lines of their closing statements or knew of the perilous effects is ridiculous. Has anyone tried to read these 1" thick documents at closing lately? People need housing at affordable rates and not fall prey to this corporate greed. Let's fact it, they knew what they were doing and the Government for the most part imposes no restrictions on these practices. In effect, they did not have to market this kind of product to the consumers knowing the outcome. These institutions can very much afford to offer loans at 3 and 4 percent and still come out on top.Our Government needs to impose more stringent laws on lending practices rather than to feel sorry for these bandits with briefcases; will they do it? I doubt it very much, especially at the hands of this current administration.