The Coming Credit Card Debt Apocalypse

At the worst possible time for millions of Americans struggling to feed their families and maintain their residences amidst a still stifling post recessionary economy — much of the United States still besieged by ruined markets and bleak financial indicators — the multinational banking conglomerates effectively controlling credit card debt accounts within this country have embarked on a massive roll back of borrowing opportunities.  According to experienced analysts with knowledge of the consumer finance industry, the recent dramatic about turn of corporate emphasis will impact not only new applicants (whether hoping to get approved for their very first credit card or merely trying to land an additional line of credit) but also those existing borrowers in good standing who may see their balances abruptly cut without warning.

“The banking community enjoyed such incredible profits around the turn of the twenty first century, that — there’s no other way to really say it — they just started to get a little cocky,” explained financial correspondent and credit card debt relief blogger Harold Jamison.  “Across the board, we would see eligibility qualifications dip lower and lower as all sorts of borrowers were deluged with pre-approved card offers.  We’re talking about folks who wouldn’t have had a shot at being even considered for an unsecured line of credit back in the early 1990s, and, now, all of a sudden, the banks are just opening up the flood gates and saying that they basically trusted each and every consumer willing to sign their name to a lending contract?

“I think a lot of us knew there was bound to be trouble down the line,” Jamison continued.  “All you had to do was step back and think: ‘really, a twenty year old still in college without any credit history and no job is going to be able to treat ten grand worth of credit card debt seriously and responsibly?’  All the same, I don’t think anyone realized the problems would appear this quickly or be quite so severe.”  The gravity of the current lender circumstances is hardly in dispute, as loan balances continue to default in ever greater succession and the number of accounts charged off by the creditors for corporate tax benefits — an intrinsic safety net that formerly safeguarded lender balance sheets when appearing in reasonable numbers but, in such extreme bursts, can’t hope to stem the fiscal bleeding — has scaled historic heights of economic unease.

Although the lending community has yet to spiral toward the most pessimistic estimates, financial prognosticators generally believe the associated credit card providers could this year charge off as much as one hundred billion dollars (around ten percent of the entirety of all credit card debt owed by United States households), and commentators fret that we’re far from the eye of the storm.  “You look at the old debt relief methods that the average Joe Six Pack used to depend on when times were tight, and they’re just not there anymore.  Because of the credit freeze, consolidating everything onto one card is no longer a realistic possibility unless you have out of this world FICO scores, and, in terms of a credit card debt relief equity loan on the home mortgage, that industry isn’t even still in existence.  Unless they can somehow manage to convince the lenders to barter down an affordable debt settlement, you’re going to see a ton of men and women who just can’t avoid bankruptcy protection for their bills.  Things are going to get a whole lot more complicated just to erase the sins of the past.”