by Joseph Kenny | 01/10/08

If you have a high income and a stellar credit record, you may receive numerous invitations to apply for gold and platinum credit cards.  A number of financial institutions have been offering special incentives for those cards, including generous credit lines.

However, now it seems that a number of consumers toting gold and platinum credit cards around are having a difficult time maintaining their lifestyles.   American Express, for instance, reported a sudden upsurge in delinquencies last month.  The news is particularly alarming, given the fact that the company is known for its credit-savvy customers.  

Financial institutions have placed much stock in high-end credit cards because they command higher customer fees and higher merchant fees as well.  The cards also carry with them a number of perks which have helped to make them quite popular.

At Bank of America, card losses are expected to increase 6% in 2008, a loss which will total half a billion dollars.  A rise in the nation's unemployment rate is also causing worry for banks at a time when the overall economy is teetering on the brink of recession.

At the same time, banks are already reeling from the nation's housing crisis.  Home sales and prices have been plummeting - a situation which may not turn around until 2009 or 2010.  A number of homeowners with high-risk subprime mortgages have defaulted on their home loans, leading to widespread discontent in the housing industry.

Meanwhile, the Federal Reserve Board has promised to do all it can to keep recession at bay.  The Fed cut interest rates consistently in 2007, and some observers believe that additional rate cuts may be in the offing in 2008.  On the campaign trail, the housing crisis has become a key issue, as voters' attention turns from foreign to domestic concerns.  In fact, the individual who wins the Presidency may be the one who appears best equipped to handle the nation's economic woes.