As high interest rates and the sub-prime mortgage crises continue to put a squeeze on the economy, US consumers are increasingly turning to credit cards to bail them out, according to Mail Monitor, the credit card direct mail tracking service from global market research company Synovate.

Mail Monitor tracks credit card acquisition volumes and response rates throughout the US, and evaluates attitudes, behaviours, terms, and usage for each card in consumers' wallets. "US households now have access to an average of $26,317 of revolving credit on their cards while average incomes are around $60,000," said Andrew Davidson, Vice President of Competitive Tracking Services for Synovate's US Financial Services Group. "The ratio of available credit to income has been steadily climbing, in line with inflation, over the past four years. However, in the last 12 months, it jumped from 50% to 56%. This 6% increase is more than double the annual rate of inflation and is a direct response to the current economic climate," he said.

While the housing market cooled and interest rates began to rise, cardholders have been adding to their revolving debt. In turn, credit card issuers have responded by making more credit available, according to Davidson. "Revolving balances on credit cards are at an all time high with US households now owing an average of $6,970 up from $5,084 just four years ago," he added.

In order to access more credit lines, there are now more cards in consumers' wallets. "US households now own an average of 2.8 cards compared to 2.4 cards just four years ago," said Davidson. "For a market considered to be saturated this represents significant growth. Credit card issuers continue to be more and more creative with their offerings and the increase in solicitations for cards promoting loyalty points and/or cash back has led to additional cards in the wallet."

With US households now having more access to credit than ever before, and more foreclosures on the horizon, the concern is that revolving balances will continue to rise while incomes remain flat. For households that are already stretched it may be difficult to free themselves from escalating debt. However, the recent surprise cut in the federal funds rate will go some way towards alleviating the burden for cardholders as APR's, particularly those on variable rate cards, begin to decline.

Synovate Mail Monitor also tracks the credit card Utilization Ratio, which represents current outstanding balances plus new charges expressed as a percentage of the total credit line available across all credit cards in the household. The Utilization Ratio is a key indicator of the 'credit health' of the nation as it shows to what extent consumers have maximized their available credit.

Synovate organises households into five types based on their Utilization Ratio. These are Zero (0% utilization), Light (0%-3%), Average (3%-9%), Heavy (9%-30%) and Ultra (30%+). Ultra Utilization households are more likely to be sub-prime as they have utilized 30% or more of their available credit and have lower than average incomes. A figure of 30%+ is considered risky by the card industry as a staggering 83% of Ultra Utilization households carry a balance each month and the average revolving balance is $9,890 up from $8,069 just four years ago.

Not surprisingly, given that many of these households are fully utilizing their available credit each month, one in four were charged a late or over the limit fee in the past year. "The number of Ultra Utilization households has increased from 22% to 26% over the past four years," said Davidson. "The rate cut by the Federal Reserve will help. However, this large and expanding segment is maxed out, owe huge amounts and yet continue to spend on their credit cards each month. Ultra Utilization households will be most at risk over the coming months as we see the full extent of the sub-prime mortgage crises unfold."