Valued Contributor
Posts: 1,900
Registered: ‎01-05-2010
Re: CLI: is it really advantageous?

RobertEG wrote:


on the average, consumers tend to establish  the same approx. level of % util as prior to the CLI, thus increasing their debt while evaluation of their credit in granting the CLI shows that the consumer risk does not increase much, if at all.  Mo' debt, mo' interest..... mo' money!


And yet, on average, the income growth in the past thirty years has been zero for the bottom 90% of the population. A probable explanation could be that people expanded their wallets by resorting to stuff like moving the homemaker spouse to the workforce or putting less aside for retirement. When that's no longer enough, I suppose the consumer risk may go up. It has already happened to some extent as the financial crisis has increased credit card issuers' chasing of customers' balances.