More than $1 trillion (£500 billion) is held on credit cards in America. In the UK, debts of more than £50 billion have been run up on the plastic. Across the world, somewhere between $2 trillion and $3 trillion is owed on credit cards.Read the entire story here. The hard truth is that credit card defaults could not just be the next but, quite possibly, the final shoe to fall. As the story discusses, credit cards have been the last line of payment defense for many consumers--including such basic expenses as food, shelter, and power.
Up to now, the credit crisis has passed by without plastic going into meltdown. Statistics have shown steady levels of arrears, and suggested that many consumers have been successfully paying off part of their balances.
Now there are increasing signs that this last breakwater, shoring up the economies of the western world, is about to crack under ever-increasing strains.
When the credit card market contracts later this year/early next year, the chaos will be unique among recent generations.