Credit card debt the next shoes to drop?

[trent]

Many financial experts expect the next huge credit problems to come from credit card loans gone bad. I personally agree, and I'm sure that many Canadians will default on their credit card debt. What do you think

[Canadian]

I would say credit cards and car loans. Have you notice how many expensive cars there are on the Canadian roads? I doubt it that even 5% of all these people can really afford the cars they are driving. We shall soon find out .

[sunshine]

I think this is not good. It seems to me everybody is hoping for some kind of bailout these days... Banks, investment companies, credit card companies, car manufacturers, who else wants some money? Anyone?
This is getting rediculous

[invest]

I agree credit card companies would be next. People spend more than they earn and they have huge credit card debt. Someone has to pay for it. I am curious what will be the consumer spending this year. In the past was always more than expected - lets see this year what will happen.

[Steven]

Keep in mind that total credit card debt it's much lower compared to mortgage debt, so this might not be as serious as some people expect it to be.

[trent]

Originally Posted by Steven

Keep in mind that total credit card debt it's much lower compared to mortgage debt, so this might not be as serious as some people expect it to be.

You are right that the total credit card debt level is lower compared to the total mortgage debt, however don't forget that credit cards are essentially unsecured loans, while a mortgage is secured by the house itself. So if a borrower defaults on his credit card, then the bank loses the entire loan, while with a mortgage default the bank can recoup some of the losses, by selling the house.

[Canadian]

Originally Posted by trent

You are right that the total credit card debt level is lower compared to the total mortgage debt, however don't forget that credit cards are essentially unsecured loans, while a mortgage is secured by the house itself. So if a borrower defaults on his credit card, then the bank loses the entire loan, while with a mortgage default the bank can recoup some of the losses, by selling the house.

But still, the impact of many Canadian borrowers defaulting on their credit card debt, will be devastating for the banks and the economy.

[Ranana_veitty]

More than four million Britons are still struggling to pay off their credit cards from last Christmas as the debt crisis worsens amid the economic downturn - Telegraph report.

[Canadian]

Originally Posted by Ranana_veitty

More than four million Britons are still struggling to pay off their credit cards from last Christmas as the debt crisis worsens amid the economic downturn - Telegraph report.

I don't think it is much different here in Canada.

[trent]

I hope the employment picture start improving by the Fall, as only this will cause a real recovery.