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Racking up the credit card debt

Posted by Yankee on August 24, 2005 - 12:13pm
Topic: Demand/Consumption

I don't think I've made a secret of the fact that I'm fascinated by how much credit card debt Americans accrue. I remember that when I lived in Europe at the end of the 1990s, they wouldn't even issue credit cards to most people (I don't know if this has changed).

Last night reader mw left a link that got buried, so I'm moving it up:

Credit cards soaking up gas woes

According to this article, last year, about 54% of all gas purchases were made with credit cards. This year, it's 70%. As mw said: "Wow... that's a big jump."

Other interesting factoids in the article (granted, some are obvious):

  • With a credit card, that $2.60 plus a gallon can easily morph into $3 a gallon if the consumer doesn't pay off all charges immediately and finance and interest charges start to accrue.
  • Sales of premium and midoctane gasoline have tanked over the past few years as use of regular unleaded has risen
  • The end of summer not only means fewer drivers but also less-expensive gasoline, as the specifications change to make cheaper winter grade gasoline.
(Re: the latter point—the savings is about 5¢ a gallon.)

Again, I send out my plea: I really want to know what will happen to the people who have massive personal debt if the economy should go bust. If you are able and willing to write up a short piece on the ramifications of high personal debt (other than how it affects one's credit rating), please let me know.

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