I Am In Debt, But Not Like This
I feel better about my debt now. I am not using my credit cards to get by. This is got to be one of the worst places to be in life. Borrowing to eat and be able to get to work?
US deep in debt and still digging
All the numbers say the average debtor in the U.S., now unable to pull cash out of his or her house by refinancing a mortgage, is running up home-equity debt and credit card balances instead. Average balances on home-equity lines climbed 8% in the first quarter of 2008 from the first quarter a year earlier, according to Moody’s Economy.com. Average balances on credit cards were up almost 10% in the first quarter.
The geographical pattern of this buying is absolutely predictable: Home-equity and credit card borrowing is rising fastest in those areas where home prices have dropped the most. Credit card balances were up 15% in the first quarter in California and Florida, and up 20% in Nevada.
The numbers also say this extra debt isn’t going for handbags at Coach or cases of Bordeaux. Credit card companies are reporting that the fastest growth is in categories such as groceries and gasoline. People are using debt as a bridge, it seems, in the hope the economy will recover before they have to make deep cuts in their spending.
