From HELOC to VISA

This interesting article form CNN Money explores how people are using their credit cards to survive. As the ability to live off one's equity is no longer available to many, they are turning to the credit cards. Here are some of the alarming numbers in the article -

Finding themselves strapped for cash and unable to use their home as an ATM, Americans are increasingly turning to credit cards to cover gas, groceries and other living expenses.

... Government and agency statistics illustrate this troubling trend. The Federal Reserve reported Wednesday that Americans' credit card debt jumped 6.7% in the first quarter of this year to $957.2 billion, This spike comes despite the fact that nearly one in three banks is tightening guidelines for credit cards.

For many people, racking up credit card debt is not a choice they want to make, experts say. Not too long ago, they could have tapped into the equity in their homes through loans or lines of credit or refinancing. But this debt, which usually carries lower interest rates, is no longer as widely available with the collapse of the housing market.

... Not surprisingly, those facing the greatest stress tend to be in weak housing markets who are already struggling with their mortgage payments, experts said. Also, as unemployment ticks up and companies cut back on overtime, some people find they don't have enough income to pay the bills....

Credit card delinquency rates hit a 4-year high of 4.53% in February, according to Moody's, a debt rating agency.

... Meanwhile, card balances have been creeping up steadily since the start of 2006, and jumped nearly 9% during 2007, according to Equifax, a credit data and analysis firm. That's due to a combination of people spending more and paying off less each month, said Myra Hart, senior vice president of analytical services at the firm.

The number of credit cards issued has also risen. At the end of 2007, there were 420 million cards on the market, up 7.6% from a year earlier.

Record debt against not savings. Somethings has got to give and when it does it will not be pretty or pleasant.