Tomorrow's crisis: Credit cards

As the foreclosure crisis continues to drag down the economy, it might be worth taking a moment to consider the next step in our ongoing tale of economic misery.

As Joe Nocera pointed out in the December 1 New York Times, credit cards, which are easier to get (and easier to screw up) than mortgages, are headed for the same sort of meltdown. With cardholders facing unemployment or reduced salaries, it seems likely that they will also have problems making their minimum monthly payments. This will probably translate into serious problems for card companies.

In many ways, the excesses of the mortgage market are mirrored in the credit card industry. For example, the tendency of some borrowers to exaggerate their income and downplay their expenditures has been blamed for a large percentage of the bad mortgages out there.