Home Equity ATM Tapped Out, Hello High Interest Debt

Looks like the home ATM is tapped out. Home lending has down-shifted in the past few months, and more and more homeowners are finding it nearly impossible to use their home equity line of credit to pay for their credit card bill, a practice that has become widespread in the past few years of EZ credit and low interest rates.

But times, they are a-changing and, “You’re not going to be able to get that mortgage loan. You’ll be stuck with the higher interest credit card debt,” warns Carl Steidtmann, chief economist with Deloitte Research. “We will have to live within our means. I know it’s a troubling phenomenon. But we’re not going to be able to spend at levels well above our income levels.”

What do you mean ‘live within our means’? Isn’t living outside our means the American way?

Here we are reminded of a Saturday Night Live skit that we are licensing for use in our upcoming documentary. In the sketch, Steve Martin and Amy Poehler play a married couple visited by a credit counselor of sorts, who is trying to advise them on how to NOT buy stuff they can’t afford. You can watch the skit below.

Kate Incontrera
for Markets and Money

Kate Incontrera
Kate Incontrera is the managing editor of Markets and Money. She is also the author of Markets and Money's Weekend Edition, a weekly wrap-up of contrarian investment analysis.

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Sean Healy

Quite funny. Unfortunately it’s true that this message could be thought of as revolutionary in some circles.

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