In the olden days, you had two options. A pre-paid credit card or a charge card. The charge card meant that you had to pay off the balance every month, you could carry over but interest was insane and they would pull the card if it wasn’t paid off in 3 months. I think that the ‘credit’ idea has greatly contributed to both individual financial problems as well as the national and international. I was raised by my immigrant parents who to this day do not have credit cards. We were raised in house where credit was only used in extreme emergency and if you didn’t have the cash for something then you didn’t get it. Yet we never did without anything. They just sold their mortgage free house for three quarters of a million dollars, that was built 28 years ago and paid for in cash. They own everything they have and owe no one. They raised us to do the same. I have $70,000. worth of credit available to me on the three credit cards that I never use. Every year or so Visa, Amex and MC sent me either notices that increase my amounts or coupons or airmile offers trying to induce me to use them. I don’t because I don’t need too. NEED being the operative word. If people would not give into their wants so easily, regardless of the repercussions, perhaps the country would not be in such bad shape financially. It is sad really.
We have become a consumer based society, we want, we want, we want. Credit card companies and lending companies have taken full advantage of this national mentality and for years have profited from the people you describe. Now that these people have no houses, no jobs and no means to make even the minimum payments look at what is happening. I think the credit card companies will follow suit and soon I’ll be getting notices from them saying, although we value you as a client we are no longer able to offer you blah, blah, blah.

This is a very interesting question. I would think so, with all these highly paid bank employees running out of jobs, last I heard was 190,000 jobs lost in Finance in the US during past year alone. There’ll be lots of delinquencies and these corporate melt down may spread into retail banking melt down too.