Earn What You Spend

From the WSJ: 
As part of a sweeping bill to change the rules for credit cards, a pair of senators are pushing to lift constraints that Visa, MasterCard and other credit card networks impose on merchants’ ability to offer discounts for paying by cash or check.
Retailers have long chafed under the restrictions, which make it burdensome [...]

I’ve written before about the challenges facing the credit card industry - and it looks like these challenges are now showing up in the balance sheets of these companies. Clusterstock summarizes what the rating agency Fitch had to say about the industry today: 
Rising unemployment will push up the losses on credit card portfolios while shrinking [...]

Unsurprisingly, December sales in most retail stores were quite soft - and this time the impact didn’t spare discount retailers such as Wal-Mart, who have been rising above the competition because of their low prices:
Following the worst set of data in decades for November, sales were expected to be nearly as bad for December, thanks [...]

The consumer credit card crisis is underway.
Consumer debt has far outpaced real growth in wages:

 
 
 
 
 
 
 
Source: Innovest
And we’re beginning to see the ramifications of this.  From this morning’s NYTimes:
After years of flooding Americans with credit card offers and sky-high credit lines, lenders are sharply curtailing both, just as an eroding economy squeezes consumers.
Currently, the total losses amount to [...]

There are those that argue that the growth in consumer debt - especially credit cards - is primarily due to the wealthy.  Even if that may be the case, it does not mean the wealthy have the means to pay off this debt - the fact remains that consumers are overleveraged.  I previously made the [...]

Spending only what you make shouldn’t be a foreign concept.  It’ll become a whole lot more familiar in our current economic climate.
Henry Blodget at Clusterstock explains why consumers are a critical component of this recession.  [via Feelix]
Because the US consumer is finally broke.  For thirty years, we piled on debt and then spent almost every new [...]