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[Chips]

Card issuers are struggling to defuse a consumer-debt bomb that could blow an estimated $41 billion hole in their businesses this year -- and even more in 2009.

By BusinessWeek

The troubles sound familiar:

Borrowers falling behind on their payments. Defaults rising. Huge swaths of loans souring. Investors getting burned.

But forget the now-familiar tales of mortgages gone bad. The next horror for beaten-down financial companies is the $950 billion worth of outstanding credit card debt -- much of it toxic.

That's bad news for players such as JPMorgan Chase and Bank of America that have largely sidestepped -- and even benefited from -- the mortgage mess but have major credit card operations. They're hardly alone. The consumer-debt bomb is already beginning to spray shrapnel throughout the financial markets, further weakening the U.S. economy.

"The next meltdown will be in credit cards," says Gregory Larkin, a senior analyst at research firm Innovest Strategic Value Advisors.

Adds William Black, the senior vice president of Moody's Investors Service's structured finance team: "We still haven't hit the post-recessionary peaks (in credit card losses), so things will get worse before they get better."

http://articles.moneycentral.msn.com/Banking/CreditCardSmarts/the-next-meltdown-credit-cards.aspx

[ameliabelle1]

its only logical.  America bought, bought, bought and bought way beyond their means and now its all coming to a crashing end.  I think the average American debt (not including a mortgage) is in the $8000-9000 range!

[lordfly]

Does this mean my ought-to-be-a-crime 30% APR is going to go even higher?

Or, even better, what happens when the bank folds? Do I get to stop making payments on my card?

Ah, to be a freeloader and not to have to answer such questions.

I used to work at a place where the solution to a person's credit problems was to simply throw away bills and disconnect the phone. Grown adults, mind you.