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Consumer Leverage Ratio - A tool to measure the ticking credit time bomb lurking for your customers

My co-author, Ian MacMillan and one of his colleagues, William Jarvis have just weighed in on a topic near and dear to my heart—the deadly situations companies create when they lend more and more to over-extended consumers (see post on why the smartest behavioral economists in the world work for credit card companies).  In an article forthcoming in the Harvard Business Review, they show how devastating accumulations of such debt can be, and offer a simple tool to help companies figure out when it could come to harm them.  Check it out – very interesting stuff. 

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