Americans have used their homes as ATM machines for many years. And as home values have declined lately, their ability to refinance their way out of cash crunches has vanished.

But wait, there's a new type of debt in town: credit cards!

While not exactly new, there is new focus on credit cards and their rampant use. In fact, several sources report that the 'average' American today carries roughly a $10,000 total balance on one or more credit cards. So, while access to funds through home loans may have dried up due to issues with collateral values recently, an increase in unsecured credit card debt may now be occurring.

Well, let me re-state that: IT IS OCCURING!

According to the Federal Reserve, credit card debt is well on its way toward $1 trillion dollars. Now, that's a lot of debt! Sure, it may be a nationwide total, but that's a lot of vapor. It's vapor because it's unsecured -- or without backing of any collateral.

And that is almost even more worrisome.

It's worrisome because where is all of this money going? What is it being used to purchase? While taking out a home loan, the property serves as collateral. With that you can say, here is what I bought. It's tangible. But what is unsecured credit card debt purchasing?

Is it gasoline as it has recently sky-rocketed, although calming down as of late?

Is it food, clothes, electronics, housewares, & furniture?

None of which typically serve as good collateral because they're consumable… well not exactly… perhaps 'disposable' or 'depreciative' would be better words to use here.

I suppose the disconnect for me, as a banker, is useful life of the product purchased vs. time said amount is financed. Moreover, are we still paying on debt for a product when it now sits in a landfill somewhere? I'm thinking the answer to that question is more often than not: yes!

In any event, despite arguments on the actual useful life of a GI Joe with the Kung-Fu grip, unsecured debt is rising to pretty substantial levels. After all, how many lifetimes would it take to count a trillion dollars if counted dollar-by-dollar? (I'm sure one of you out there have done the calculations. How about it per moenia urbis?)

So, it's a negative trend we can surmise, which begs the question, " Is this the next shoe to drop credit-wise in America?"

Perhaps.

The other worrisome issue I think today is regular e-mail alerts from the Fed that I receive entitled, "Federal Reserve will offer $150 billion in 84-day credit through its Term Auction". The Fed is absolutely flooding the market with cash. Last December, these e-mails read, "the Federal Reserve will offer $20 billion in 28-day credit through its Term Auction". So, we've leaped from $20 billion to $150 billion!

Hopefully, someone at some point has a big mop to soak up all of this cash being put in the economy, or we're going to need a wheelbarrow of cash to buy a loaf of bread.