06-18-2008 06:09 AM
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."
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