Credit card risks

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>   Matt writes;
>   …But as far as credit card debt, I think that
>   the negative reporting may be overblown by
>   debt doomsday types. Ive always suspected
>   so, and may finally have found the proof in a
>   column I read by Gene Epstein in Barrons back
>   in October. Excerpt: “…But according to a
>   source at, approximately
>   $400 billion of the nearly $1 trillion in
>   outstanding credit- card debt is paid down
>   completely each month, essentially used as a
>   short-term interest-free loan. More than $500
>   billion of the rest is owed by users who pay
>   somewhere between the full amount and the
>   minimum due. Only about 6% of the total is
>   owed by customers who pay only the
>   minimum.”
>   The $500B he identifies as carry over debt is
>   the real credit card debt (to me), and is
>   equivalent to about only 6 weeks of US retail
>   sales. It also probably includes much business
>   wholesale trade as many businesses are using
>   AMEX Corp Card and VISA Business for small
>   purchasing nowadays, often for the “rewards”
>   programs.
>   I think the government and media reports on
>   credit card debt are only taking a snapshot of
>   balances at a given time in a month, and as
>   monthly closing dates on the cards can vary
>   from one cardholder to another, and the cards
>   are continuously used throughout the month,
>   the number looks larger ($900B) than what I
>   think they are trying to track, which I think is
>   the $500B amount (true credit card “debt”).
>   $500B is about $1650 per capita. I dont think
>   this will be a much of a drag for the US
>   economy.
>   Perhaps this perspective will give you some
>   hope that the large stimulus package is going
>   to help improve the economy this year.