The Credit Card Shuffle?

The resiliance of cosumers to spend their brains out over the past couple of years has been remarkable to say the least.  Today Mastercard said that quarterly earnings soared nearly 70%, as it processed record credit and debit card transactions globally

The company reported that its first-quarter earnings and revenue climbed from the same quarter last year, thanks to growth in the amount of international purchases made using the company's credit cards.

Could it be that consumers in trouble with the reduction in MEW money available have been switching to their creidt cards to fund their growing deficits and monthly payments.  I find it concerning that the major credit providers are increasingly the main retail bonds for sale at broker-dealers right now:  Wells Fargo, MBNA, American Express, Household Finance, GE capital, all with A and better credit ratings–at least so far.

I am reminded of all the auto maker bonds that were flooding the market back in 1999-2001 before their financial statements brought significant downgrades and bond holders suffered big price drops.

Question: Who is going to be left holding the most bad credit when the consumer can no longer toss debt around from one card to another and admits they cannot pay for the things that they have charged to their cards?

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