As the recession continues to squeeze financially vulnerable American households, they are turning to credit cards to make ends meet, according to “The Plastic Safety Net: How Households are Coping in a Fragile Economy,” a new report published today by Demos, a national research and policy center.
This is Demos’ second national survey examining credit card debt among low- and middle-income households–those whose incomes fell between 50 percent and 120 percent of local median income. It provides new information about why households are in credit card debt, how long they have carried their debt, and the impact this debt has had on their economic security.
Research shows that credit card debt in America has quadrupled since 1989 and increased 41 percent just since 2000. Americans now owe over $1 trillion in credit card debt, owing largely to job instability and medical costs, and personal bankruptcies rose from 673,615 in 2007 to over 1.2 million in 2009. continue reading