Posted on 09/21/2025 2:29:19 PM PDT by CIB-173RDABN
By The Hermit
There’s a quiet crisis unfolding beneath the surface of the U.S. economy: over a trillion dollars in credit card debt, the majority of it unsecured, with no collateral, no real oversight, and no meaningful limits. It’s not just a number — it’s a ticking time bomb.
It may not look like 1929 — but in structure, in risk, and in who will bear the fallout, it feels dangerously familiar.
In the 1920s, Americans were allowed to buy stocks on margin — putting down just a fraction of the cost, borrowing the rest. It gave the illusion of prosperity. Until the crash came.
Today, we are doing the same thing with unsecured consumer credit. Millions of people have multiple credit cards, with combined limits that exceed their income — sometimes by tens of thousands of dollars.
Some carry balances of $40,000 or more on cards charging 25–30% interest. They pay every month, but the balance barely moves. It’s not “credit” anymore — it’s debt servitude.
This isn't about taking away credit or punishing responsible borrowers. It's about putting boundaries on a system that currently has none.
No one should be allowed to carry $50,000 in unsecured credit card limits unless their income truly supports it.
Credit scoring agencies already track all open accounts. A total cap based on verified income is feasible — and long overdue.
30% interest is not risk-based lending — it's legalized usury.
Allow a fair return (such as Prime + 2%), but stop trapping people in endless compounding cycles.
Late fees, penalty rates, and obscure charges have turned into billion-dollar profit machines.
Lenders should make money by lending responsibly, not by penalizing distress.
No 18-year-old should get a $5,000 credit line without income to back it.
Credit should grow with experience, not be granted recklessly at the start.
Banks and credit card companies are already heavily regulated by the federal government:
So this isn’t a radical idea. It’s an extension of existing oversight — aimed at an area that’s spiraled out of control.
I’m not against businesses making a profit.
But when those profits depend on pushing working Americans into unsustainable debt — and when the collapse of that system could drag down the entire national economy, or even the world economy — it’s time to act.
If the U.S. consumer debt system crashes, the entire global financial structure is at risk. We’ve seen this before:
The credit card crisis could be the next chapter — unless we change course.
This issue doesn’t belong to the left or right. It affects:
Unchecked credit expansion threatens all of us. And it threatens the very foundation of the American economy.
We have the tools. We have the data. We have the regulatory bodies. What’s missing is the political will to say:
Enough.
No more financial traps disguised as credit.
No more profit models based on national instability.
No more silent servitude buried in the fine print.
This isn’t a call for ideology. It’s a call for sanity — and security.
– The Hermit
If you’re a banker, always remember that a person in need is a person to be squeezed.
One could say the same thing about million dollar mortgages on new construction mold magnet tar paper shacks. There is no real collateral involved except maybe the lot; no where near the ‘value’ of the ‘money’ created.
This is between the lender and the borrower.
It’s not my business.
Why do lender/borrower problems become tax-payer problems?
The other day I received a letter from my credit card company. They are raising my card’s interest rate from 19% to 27%. Just because.
I’m not too upset about this because I pay off my balance every month. Nevertheless, I find it curious. Maybe my credit card company just doesn’t like me anymore.
Mine lowered my limit as I am only using a tiny fraction of it and always pay it off.
When my daughter was in college, she would get offers for guaranteed credit cards weekly, even though she had no income. She never got any, thank goodness.
Many years ago I/We went 100% debt free, have paid cash for 2 different houses recently, write checks when we need a new car.... Have not and will not EVER BORROW ANOTHER NICKEL. Life has been Great since that decision was made. It helps to have a modest income too.
When a sufficient number of states reinstate usury laws...maybe then the industry will reward good credit risks.
When it drags the country into Depression II.
Because investing in politicians offers the greatest return on investment.
Get yours while supplies last!
Bring back usuary laws. Cap credit card interest rates at say, 8% and the cards will dry up. But certain people oppose that.
“Credit scoring agencies already track all open accounts”
Currently scoring agencies are a joke. There are way too many ways to “game-the-system”.
It’s a free world. If someone wants to risk bankruptcy while someone else is willing to lend to a marginal borrower for sufficient compensation, so be it.
Also have excellent credit. Tried to take out an equity loan from the bank that holds our mortgage. I’ve been paying it down faster than agreed so there should be plenty of equity.
They needed an inspection, which valued the place more than twice what we paid. Then they didn’t like our existing home insurance coverage, which would have required another inspection by the insurer. After all that, I could get a better interest rate from an unsecured loan through Sofi.
I’m already a customer with a stellar payment history on an asset that’s appreciated. My salary and credit rating have got to be top 5% in our rural county. WTH more do they want? How does any regular working schmuck get a loan? I wasn’t even asking for all that much money. I could float it at least one of our credit cards if I didn’t care about the interest rate.
While I agree with the general direction of this, I’d need to review the details...
At any event, one thing we need to realize is that the lower the interest rate, the less people will be able to get (or keep) credit cards. As banks will need to cut back on their risk profiles to match the lessened revenues.
This is not entirely a bad thing. “Excessive” credit card debt, especially at today’s prevailing very high interest rates, hurts lower income people the most.
It is, though, something we need to keep in mind? Perhaps a phase-in mechanism to allow folks to adjust the way they handle their daily finances..... and to prevent millions of credit card account from being closed all at once? Cancelling millions of credit accounts all at once would jolt the economy at least as much as the author’s feared crash. Or?
The consumer is the least of our problems.
The Congress and the lobby are the problems.
It's the same old nonsense over and over again. "Banks are discriminating against [NAME RACIAL/ETHNIC GROUP] by refusing to extend them credit."
Clearing you debts probably won’t stop the collapse.
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