Consumer debt crunch and division by two

Jordan Hayes jmhayes at
Mon Jun 8 00:54:45 PDT 1998

> Yoo explains that households below the median income level
> increased their percentage of overall credit debt from 24% in
> '83 to 30% in '95.

Isn't this mostly an effect of housing costs and more people being able to 'qualify' for loans?

> In addition, BW reports that the average credit card debt for the
> "bottom half" rose 14% annually from '92 to '95, vs. 8% annually
> for the "upper half".

This is probably due to upper-half folks having access to cheaper kinds of debt; home equity, "preferred lines" even margin. Ever since consumer debt lost it's deductibility, this shift has been occuring. So those with cheaper rates of carry can increase their load easier than those who have high rates.


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