CREDIT CARD DEBT IS SURGING - Savings Hit All-Time Low

(09/30/2005)

Surging prices for gasoline and energy have spiked the amount of overdue credit card bills across the USA. The number of bills overdue at least 30 days has climbed to an all-time high of nearly 5 percent. An American Bankers Association says that figure is expected to increase. Meanwhile, debt-ridden consumers are facing a deadline because new rules making it more difficult to take-out bankruptcy goes into effect in October. "The last two quarters have not been pretty," said Jim Chessen, the association's chief economist, regarding unpaid debt. "The rise in gas prices is really stretching budgets to the breaking point for some people," Chessen said. "Gas prices are taking huge chunks out of wallets, leaving some individuals with little left to meet their financial obligations." The personal savings rate dipped to a record low of negative 0.6 percent in July. Late payments are bad news for consumers, but credit card companies love them. Late fees were once a minor part of credit card company revenues. Now they account for more than 30%. If this trend were to continue for a sustained period, it could spell trouble for the overall economy, said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group. "It's a flashing yellow light that we need to watch," she said.

Hur Herald ®from Sunny Cal The information on these pages, to the extent the law allows, remains the exclusive property of Bob Weaver and Dianne Weaver The Hur Herald. All information may be freely used but must not be sold or used in any type of commercial endeavor, or used on any web site without the express permission of the owners ©Bob and Dianne Weaver, The Hur Herald, 1999, 2000, 2001