|  Across My Desk: New survey report reveals truth behind credit card debt explosion in the United States
Most folks I know use credit cards to pay for all sorts of things from groceries to exotic trips and gifts. What I don't know is how many of them pay off that debt each month. If credit card debt is of interest to you, here's a report that may be an eye-opener. According to The Center for Responsible Lending, more families are using their credit cards to keep their life afloat. And with wages relatively stagnant for the low-and middle-income worker bees in America (while soaring for CEOs), that's not surprising. Here are some findings for a report titled The Plastic Safety Net: The Reality Behind Credit Card Debt in America: Credit card debt in America nearly tripled in the 1990s and has increased 31 percent since 2000. Americans now owe some $800 billion in credit card debt. In addition, owing largely to job instability and medical costs, bankruptcies rose from 616,000 in 1989 to over 1.8 million in 2004. The average credit card debt of a low- and middle-income indebted household is $8,650.Seven out of 10 low- and middle-income households surveyed reported using their credit cards as a safety net--relying on credit to pay for car repairs, basic living expenses, medical expenses or house repairs. One out of three households reported using credit cards to cover basic living expenses on average four out of the last 12 months; households that reported a recent job loss or unemployment, and those without health insurance in the last three years, were almost twice as likely to use credit cards for basic living expenses. 20 percent of survey homeowners had paid off some credit card debt with a mortgage refinance in the last three years. Americans are increasingly relying on credit cards to pay for essentials that wages no longer cover, reliance on credit cards is having a multiplying effect that is creating millions of "debt-stressed" families: 47 percent of households had been called by a bill collector. Almost half missed or were late with a payment in the last year, with nearly a quarter of households reporting paying a late fee at least one or two times in the past year. In addition to charging late fees ranging from $30 and $39, most issuers also penalize cardholders for late payments by increasing the interest rate on the account two- or three-fold, often after only one late payment. So how do we solve the growing debt problems? Two solutions include raises --- as in raising hourly wages and then the interest rates on things like savings accounts. Both could encourage savings and discourage debt.
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