Easy Credit Puts Finances at Risk
As the housing boom peaked, consumers saw credit limits raised and lines of credit on their homes offered at attractive rates. Banks and lenders offered new card accounts at record rates, then enticed consumers to transfer card balances to equity lines of credit.
Ads in magazines and on television offered up a lifestyle that was inviting and exciting – all paid for on credit. You could buy whatever you wanted, go on exotic vacations if you only had the right credit card, which lenders were happy to provide. Talk of a housing bubble was drowned out by images of living the good life and moving up. Consumers were not only encouraged to lap up increasingly easy credit cards and rising credit limits, but the promise of a solid investment in a home bolstered by rapidly rising home values encouraged many into homes with 100% loans, no money down and low interest rates.
