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Super Contributor
Posts: 8,198
Registered: ‎03-25-2007
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Low CLs because of the Credit/housing crisis

There has been a lot of discussion about CLs recently, and I found this interesting
Basically, the CCCs were raising CLs with reckless abandon when they thought houseowners has an ATM for a home,
" this "reckless extension of credit is contributing to the financial vulnerability that many families are facing," says Travis Plunkett of the Consumer Federation of America.

USA TODAY's analysis of credit card data found that during the housing boom:

• The average credit card spending limit rose a cumulative 17%, to $8,158, after adjusting for inflation, as median pay was declining and living costs were rising. Cardholders have an average of five cards.

• Banks doubled the amount of new credit cards issued to "subprime" customers — those with tarnished credit. This group could least afford to sink deeper into debt yet were most likely to tap additional credit.

• Banks encouraged customers to use their inflated home equity to pay off mounting card balances. In doing so, borrowers converted unsecured revolving loans into debt secured by their homes, which they now stand to lose if they can't pay their bills. Many financially squeezed borrowers ran up more card debt."



The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid

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