With consumers defaulting on their credit cards at an alarming rate, we seem to be seeing the bottoming out of many consumers, who always had considered themselves middle class, but are now realizing it was all a façade and indeed, they are living in the lower class.
And if the credit card issue is not enough to convince you of serious problems in consumer spending, then consider this.
For the first time, even the $.
99 menus at fast food restaurants are not working.
Imagine when a person cannot even afford a $1.
00 for lunch, well for those who've lost their jobs, defaulted on their credit cards, they do not have to imagine it, they are living it, but why you ask? Well, there are many reasons, one is that President Obama wanted to get his stimulus package passed so badly he ended up telling us we were slipping into a depression unless we passed it, this caused more tightening from small businesses and corporation = job losses.
And when we see the Dollar Type stores, Wal-Mart and fast food restaurants with ultra low prices falter in sales, we know things are not so good.
Recently, El Pollo Loco and Carl's Jr.
have both seen nearly double digit declines in sales since the first of the year.
[cite: American Restaurant News].
Moody's survey and Credit Card Indexes show that credit card companies are charging off the debts of many of their former card holders that have been cancelled, as they do not see it's possible to ever collect.
[cite: USA Today Article].
Consumer Credit Card Crisis and Fast Food Foundations are Falling and it's going to take more than IRS Tax refunds to get consumers to start spending what little money they have left.
Think on this, we are not out of the woods just yet.