The housing debacle... The credit fiasco... The auto industry meltdown... unemployment rising, and now the Credit Card Crisis?

Consumers are building up massive amounts of debt. And many can't afford to pay it back.

It's far more difficult to dig your way out of debt now that other relied-upon options, such as home equity lines of credit, are no longer readily available.

It's so bad that revolving debt just hit a record $970 billion in September, with the average household owing more than $10,678 in credit card debt. That's up 29% from 2000.

Why do you think Discover Financial Services (DFS:NYSE) stock plunged from a $35 IPO price to $7.52? It's a card lender, and concerns itself directly with cardholder debt just like American Express.

Why Credit Cards are Next to fall...

Credit card debt is just beginning to resemble the mortgage debt problems at the core of our financial meltdown. And the last thing the financial sector needs to feel is further squeeze, as Americans have accumulated some $970 billion in revolving consumer debt since the end of September 2008, up 3.4% from the close of 2007.

Sure, the credit card industry is typically resilient during our economic slowdown, thanks to pricing flexibility. And the thinking was, that as the economy sours, and consumers become late on payments, credit companies can boost earnings through late fees and higher interest rates.

But that's no longer the case.

That's because consumers are tapped dry. Defaults are growing. Charge-offs have been pushed well beyond expectations. And losses are far outpacing what companies were hoping to account for with extra card fees and higher interest rates.

Oh, and if you think this spillover-effect from subprime has been bad... just wait until 2009 when Alt A and Option ARMs (Option Adjustable Rate Mortgages) begin resetting.

If you are feeling the crunch? CLICK HERE for a private consultation

Read Article >Reality of the 4.5% Interest Rate