"Charge it!" That seems to be how more and more people in the United States are surviving (and as you can guess, a poor long-term strategy):
Government and agency statistics illustrate this troubling trend. The Federal Reserve reported Wednesday that Americans' credit card debt jumped 6.7% in the first quarter of this year to $957.2 billion, This spike comes despite the fact that nearly one in three banks is tightening guidelines for credit cards.
In Atlanta, debtors calling the agency in the first quarter of this year had an average of $29,300 in unsecured debt, primarily on credit cards, up from $25,700 in 2007. They spent $335 on groceries and $242 on gas, on average, in April. A year earlier, those outlays averaged only $291 and $181, respectively.
For many people, racking up credit card debt is not a choice they want to make, experts say. Not too long ago, they could have tapped into the equity in their homes through loans or lines of credit or refinancing. But this debt, which usually carries lower interest rates, is no longer as widely available with the collapse of the housing market.
So, faced with soaring costs for food and fuel, people find they must charge more to make ends meet.
There was news recently about how the median income of the middle class (in Canada) stayed basically the same from 1980 to 2005. And that's at the same time that house prices in some areas quadrupled. So just because someone is using credit cards doesn't mean they're living large. It could just mean that they're trying to keep a roof over their head.
The key to using a credit card is to use it wisely, and not spend beyond your means.
But the thing is, banks know people are not like that.
If we all did the right thing we'd be buff and toned and live til we're 120 and ride bicycles to work and etc etc etc
We're not, so they lay on the temtation and Wham they reap the rewards.