• The unpaid debt portion of this with US consumers is $68 billion, thus increasing credit card debt by 7.8 per cent, the largest increase in seven years.
  
  
• Even as they spent, consumers had been going into default at a stunning rate with delinquent credit card accounts this year hitting a six-year high of 4.9 per cent and the charge-offs -when banks give up on collecting debt, have reached a all time high of 5.5 per cent in the second quarter, as per the latest data available with the US Federal Reserve.
  
  
• Since last year, major banks were setting aside billions as reserves for credit card loan loss and anticipating an increase of 20 per cent in non payments over the next two to four quarters.
  
  
• Capital One, one of the biggest credit card banks, was forced to write off $1.9 billion in bad debt in the last quarter of 2007 and serious delinquencies among some of the biggest lenders rose by 50 per cent or more in the value of accounts that were at least 90 days delinquent.
  
  
• Just like the mortgage debt which created a financial havoc worldwide, credit card debt is pooled and then resold to investment houses, other banks and institutional investors.
  
  
• US credit card debt grew by 435 per cent from 2002 to year-end 2007, from $211 billion to approx $915 billion.
  
  
• About 45 per cent of this $915 billion in credit card debt has been packaged into these pools, which not only creates a risk to a few banks but many other institutions as well who will be forced out of business due to credit card debt write offs.
  
  
• The national savings rate was 10 to 11 per cent in the l980s and since 2005, Americans have saved less than 1 per cent of their disposable incomes with a negative saving rate as of March this year, making an average America broke, and credit cards played a major role in getting them there.
  
  
• Currently, the losses on credit card debt which stands at 5.5 per cent could rise to 7.9 per cent and the industry will stand to lose $55 billion this year, as the financial crisis has seen companies laying off thousand of workers all over the US. People will add up to the credit card debt as the unemployment rate has increased by about 2 million people in the last 12 months.

The US Department of Labour reported that the US shed 1,59,000 jobs in September and the list of companies which have announced a cut in jobs read like a Who's Who of corporate America: Merck, Yahoo, General Electric, Xerox, Pratt & Whitney, Goldman Sachs, Whirlpool, Bank of America, Pepsi, Hewlett Packard, Alcoa, Coca-Cola, the three big Detroit auto manufacturers, leading newspapers, banks and financial institutions and nearly all the airlines.

To solve the ever increasing credit card defaults, banks and consumer groups are lobbying US regulators to forgive 40 per cent of the debt of most financially stressed consumers who are close to bankruptcy and they could pay off their remaining card debt, interest free in five years.Banks could begin with this test scheme on 50,000 consumers, in hopes of expanding it to tens of thousands of others.

Editor's Note:  Looks like Debit Talks and Credit Walks and Debit Transactions will continue with it's exorbitant growth while credit transactions will stagnate.