Monday, December 15, 2008

Load of Revolving Debt Especially Hard on Subprime Borrowers

Mortgage banks weren't the only ones dishing out easy credit to subprime borrowers. In an investigation conducted by USA Today, the consequences are clearly visible with foreclosures at record levels and credit card delinquencies nearing a six-year high as millions of borrowers struggle to keep up with a record load of revolving debt, mostly on credit cards.

What caused this crisis was credit card issuers were eager to extend too much credit, too quickly because of the "phantom equity" in people's homes.

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