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Credit checkForeclosures in neighboring Rappahannock County are up 900 percent from a year ago.
That lead is, of course, nearly devoid of meaningful information. The county had one foreclosure in 2006 and only 10 in 2007 — barely a blip on anyone's radar.
But there are some other ripples spreading across even so insular a county as Rappahannock, and, if economic Cassandras are to be believed, the coming tsunami they portend might make the housing crisis look like calm waters at low tide.
In the cosmic view of things, a relatively modest number of homeowners face foreclosure. But in that same grand scheme, many, many more people are in trouble with credit card balances.
Through October of last year, the value of credit card accounts that were 30 days late had grown by 26 percent, according to an Associated Press analysis. Accounts more than 90 days late had grown by 50 percent, and outright defaults were up 18 percent.
Congress and the president are on the verge of passing an economic stimulus package whose central feature — tax rebates — won't stimulate anything, but will, we hope, turn the spotlight on this huge and growing problem.
Are you going to spend your windfall by going shopping in order to kick the economy into gear?
We have our doubts.
Given the coming bleakness forecast by many practitioners of The Dismal Science, you're much more likely to use the money to pay for shopping sprees already enjoyed by paying down the debt on your overworked plastic. In other words, you're going to be trying to catch up on money already spent, not spending money anew, which is where Washington has pinned its recession-busting hopes.
The Capitol Hill response to the housing crisis was painfully slow and depressingly inadequate, but even that looks good compared to its paralysis over credit cards.
Lawmakers asked for and got tepid, lip-service agreement from mortgage lenders to put adjustable-rate mortgage resettings on temporary hold.
Now they need to demand — meaning with regulations, not suggestions — that credit card companies remove some of the fine print from their customer agreements and start playing a little more fairly.
Depending on the issuing company, the fine print allows the lender to raise interest fees whenever fancy strikes, juggle payment schedules such that higher-interest cash advances can practically never be repaid, charge interest on its own fees and penalties, and, worst culprit of the bunch, increase its interest up into the 30-percent range if you fall behind on another account.
Any other account, anywhere in the universe.
Lost your house to foreclosure? Too bad. You're now likely paying a much higher interest premium on your credit cards, even if you have never been late with a payment.
Kicking someone when they're down: Apparently, it's the American Way.
All that's got to go.
Not that we don't understand the prevailing business model. The more risk one takes, the more reward one should logically expect. The problem is, lenders have taken logical expectations to their logical absurdity.
The model dictates that those who have the least money are asked to pay the highest premiums.
And it's not working.
And best we can tell, neither are our Washington representatives — not, at least, when it comes to heading off an impending crisis that, unlike Rappahannock County foreclosures, should be blipping like mad on everyone' s radar.
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