Unemployment

[kandrathe]

Credit does not in and of itself cause debt - spending does. What are people spending on? Houses are certainly one answer. Medical expenses are another very large chunk. And, unlike mortgages, when someone gets caught without insurance and has to put the cost on the credit card, they don't get a nice gentle interest rate. They get rooked by the card companies. It may be better than suffering with no medical care, but it's a major source of debt, especially for low income families.

Are you talking about the US? Here, the lower your income the less you pay. In my state the Medicaid (free) threshold is 275% of federal poverty level. Which, this year would be $60,637.50 for a family of four. The median income for 2009 was $83,444. And, then you have other programs, like SChip.

I agree though about credit. Credit is evil, and we should vastly curtail it. I'm not sure how, but one step would be to repeal the changes they made to bankruptcy laws in 2005 that made it harder for people to file bankruptcy. This would make lenders more wary again about to whom, and how much credit they extended.