In the News

Professor Robert Frank of Cornell University, the author of Luxury Fever, compares conspicuous consumption in an economy like ours to the military arms race, and we already know that's destined to end in mutually assured destruction.
 
The key to countering this headlong rush towards ever-more expensive disappointment is to switch from conspicuous to inconspicuous consumption.
"Appraisal fraud is part of a bigger, more ominous picture," says David Callahan, Home Insecurity author and Director of Research at Demos. "As home prices have continued to increase above inflation, even nearing 20 percent per year in some cities, American homeowners are vulnerable as never before to financial ruin if home prices fall to their natural market value."
 
"To make matters worse, an increasing number of Americans have reduced the equity in their home to meet rising living expenses, like education and health care, or to pay off credit card debts.
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In his book "Luxury Fever," Cornell University economist Robert Frank noted that Microsoft co-founder Paul Allen built a 74,000-square-foot house. According to Frank, that roughly equaled the size of Cornell's entire business school, with a staff of 100.
 
The impulse to announce more success by having more home seems to span all classes.
Hefty heating bills will take the biggest bite out of the finances of households that are already struggling.
According to Tamara Draut, Director of the Economic Opportunity Program at Demos, "American families are facing financial hardship not experienced for generations, and we commissioned this survey to tell us precisely why they are turning to credit cards so often."
 
A new report called The Plastic Safety Net offers findings from a national survey of households with credit card debt.
"The Plastic Safety Net" study found that middle- and low-income households were racking up credit card balances just to cover everyday expenses. One-third of the 1,000 survey respondents said that basic living expenses contributed to their current debt level.
Last week, New York-based consumer action group Demos and the Center for Responsible Lending released findings from a new report, "The Plastic Safety Net: The Reality of Household Debt in America." The survey results found that 7 out of 10 low- and middle-income families are using their credit cards as a safety net, relying on credit to pay for car repairs, basic living expenses, medical expenses or house repairs.
 
Households that reported a recent job loss or unemployment, and those without health insurance, were almost twice as likely to use credit cards fo
Seven out of ten low- to moderate-income households said they used credit cards to pay for groceries, car repairs or house repairs according to a telephone survey of 1,150 adults conducted by ORC Macro for Demos, a nonprofit group that looks at economic opportunity and the Center for Responsible Lending, a nonprofit advocacy group that focuses on predatory lending, according to a separate report in MarketWatch.
 
Survey respondents earned 50% to 120%
One-third of low- and middle-income consumers are using their credit cards to pay basic living expenses - including their monthly mortgage, according to a new study.
 
CRL and Demos also found that even though consumers are using home-equity loans to pay down their credit cards, many households are still carrying huge card balances, increasing their overall debt levels.
"The Plastic Safety Net: The Reality Behind Credit Card Debt in America" -- a report by the Center for Responsible Lending and the public policy organization Demos -- says credit card debt in America has almost tripled since 1989 and increased 31 percent since 2000.
 
"American families are facing financial hardship not experienced for generations, and we commissioned this survey to tell us precisely why they are turning to credit cards
so often," says Tamara Draut, director of the economic oppo
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