Wallet Watch

USA Today has a front-page special on Friday, February 29th on how more Americans are using credit cards “like broke college students” to pay for their everyday necessities like gasoline, food, education costs, health care costs, etc.

Full article here, but check out this especially poignant excerpt:

Rising living costs, along with cheap and plentiful credit, have led consumers to rely more on plastic to pay for necessities they can’t live without — and luxuries they don’t want to do without. But as the economy weakens, consumers are starting to spend less on discretionary items, such as furniture and electronics, and more on such necessities as groceries and gas, according to government data. Such items increasingly are showing up on credit card bills.

…

Magnifying the problem has been the shrinking availability of a major alternative to credit cards: home equity loans. As home values have sunk, homeowners have found it tougher to qualify for such loans. So they’ve turned elsewhere, especially to credit cards, to cover daily expenses.

Even as mortgage growth slowed from April 2006 through December 2007, card debt accelerated, according to an analysis by the Center for American Progress, a liberal think tank in Washington, D.C.

“As people get squeezed, they still have the credit demand,” says Christian Weller, a senior fellow at the center. “For a few years, mortgages and home equity lines replaced credit card debt. Now, we’re swinging back to the credit cards.”