Business Week’s cover story in July 2007 addresses The Pet Economy – Americans spend an astonishing $41 billion a year on their furry friends, double the amount spent a decade ago. That’s more than what Americans spend annually on movies ($10.8 billion), video games ($11.6 billion), and music ($10.6 billion) combined. And if that’s not enough, annual pet spending is expected to hit $52 billion in the next two years.
But can the average, ordinary pet owner really afford all of this? Or do extravagances like $430 indoor pet potties, $30-an-ounce pet perfume, and $225 pet trench coats go straight on credit cards, not to be paid off for years, and fueling the bad credit epidemic we see in many people trying to get lending for a prime mortgage.
Unfortunately though, it is not always the extravagances that cause people to spend hundreds or thousands of dollars on their pets. Pet owners are often faced with an unexpected life-and-death situations, and must pay thousands of dollars for their pet’s veterinary care. One option, Pet Insurance, is a risky one in the opinion of some pet owners and it is interesting to read feedback from people that have tried pet insurance actually recommend using credit cards to pay for unexpected veterinary bills instead.
The sub-prime mortgage crisis appears to be going from bad to worse in the United States. CNN Money.com reports U.S. home foreclosure filings rose 58 percent in the first six months of 2007, and could surpass 2 million by the end of the year, mostly due to borrowers that did not qualify for conventional fixed-rate loans and instead opted for “teaser” rates that lasted only the first few years of the loan. Interest rates have now reset to unaffordable levels for the credit-damaged, sub-prime borrowers, forcing no other option but foreclosure.
With the deterioration in the sub-prime mortgage market and higher-than-expected default rates by less creditworthy borrowers, there is little to no demand for sub-prime loans, cutting off financing for many potential homeowners, and tightening credit standards for prime mortgages. Which means pet owners who may be thinking about financing (or refinancing) should probably think twice when considering charging that $1,200 Hermès collar and leash, or $500 Chanel pearls for dog parties, and keep credit card spending in case you need to save your pets life in an emergency.
SOURCE: The Pet Realty Network™ Library
Copyright The Pet Realty Network 2007 www.PetRealtyNetwork.com
