A credit card is one of the most expensive ways to borrow, yet its global usage is getting depressingly high.
In 2008, Keynesian economics, financial wizardry and “creative” accounting led the whole world blindfolded into the greatest economic meltdown since the Great Depression. Why did the economists, bankers, finance experts, and academics fail to predict what was about to unfold?
If they relied on their economic theories, and those theories did not help them to foresee disaster, have they updated those theories or developed new theories? Now, almost 10 years later, the world economies appear to be still floundering in unexplained little to no growth, increasing consumer spending, and rising personal debt, especially an increasing levels of credit card debt.
So, are the economists applying lessons learned from the 2008 meltdown, if any? Are the economists warning the national policymakers? Why does it look like the world is heading for a credit card bubble?
Let’s examine major economies to see what is happening in terms of credit card debt, which appears to be in crisis.
In the US, the Federal Reserve reported that revolving credit, which includes credit cards, increased to $1trn (£775bn) in February 2017, up from about $940bn at the same point in 2016.