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As if we didn't have enough to contend with, Arianna Huffington says we better hit the deck and prepare for the next big crisis: credit cards. No shit, honey.

Hot on the heels of the banking crisis, the employment crisis, and the mortgage/foreclosure crisis, the country is on the verge of experiencing a credit card crisis.

According to the Federal Reserve, the total outstanding credit card debt carried by Americans reached a record $951 billion in 2008 -- a number that will only climb higher as more and more people reach for the plastic to make ends meet. What's more, roughly a third of that is debt held by risky borrowers with low credit ratings.

Credit card defaults are on the rise and are expected to hit 10 percent this year. This will obviously drive many banks closer to failing their stress tests -- but it will have an even greater impact on the lives of people who find themselves sinking deeper and deeper into debt.

This news is not shocking, of course, considering that with layoffs and cutbacks slicing into cash-based wealth, sometimes plastic seems the only natural way to go. But it gets worse (of course). Just as mortgage-backed securities sent the financial dominoes dropping when the housing bubble popped, so shall the explosion of credit card-based debt in the form of collateralized debt obligations send a shock wave ripping through the already-battered economy any day now.

Hell, Amex is paying you off to get rid of you and they have a government charter in the form of bank holding company status which they earned during the heady days of TARP to buffer them from you and your default. Then again, Time said in March of 2008 that CDOs were the next big bust and that it wouldn't be pretty. And while things have certainly taken a turn for the worse, it isn't necessarily a crisis. Yet.

So while Bernie Madoff and Allen Stanford are called frauds and criminals, regulatory agencies charged with the duty of protecting America and her investors allowed this market to run wild to the tune of $45 trillion by 2007.

How old were you when you first tried credit default swaps? How many exotic credit instruments do you bundle and sell in a day? It sounds an awful lot like a seedy back alley black market to me.

The credit card companies are scared and rightfully so. In order to feed their hunger for more of this debt payoff, they offered cards to riskier and riskier individuals. And now their recklessness is about to blow up in their faces. Why should we care? Need we talk TARP? How about the stimulus? Or the 97% in value the dollar has lost since the inception of the Federal Reserve?

Source: About That Next Bubble to Burst: Credit Cards