You just know that personal debt in the U.S. has got outta hand when they start making movies about it. This film, I.O.U.S.A., opened a couple of weeks ago. No word on whether it will play in Canada.
Meanwhile, I just received a newsletter from fee-only financial planning firm Kerr Financial predicting a credit card crash in the U.S. that’s very much along the lines of the housing crash they’ve already had… And for many of the same reasons (i.e. because too much money has been loaned to people who will never be able to pay it back). The newsletter notes that “since 2003 the average inflation adjusted total pay of American workers has not increased, while personal credit has increased roughly 25%.” It goes on to say that “once investors become nervous, the securitization market for credit cards will dry up and the banks will turn off the taps.”
Could it happen? Could we see the banks trying to yank their credit cards back from millions of desperate Americans?