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  1. #1
    Registered User Semi Pro Member
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    267

    Like 2008 Americans are Running up Credit Card Debt Again

    According to a new report, Americans are charging more on their credit cards and pushing their debt balances to an unsustainable level.

    Moreover, the study showed the scary part is total household debt is increasing faster than household income.



    A lot of Americans who experienced very hard financial times in 2008 and were late on credit cards are once again charging large amounts of debt.

    The Federal Reserve found that revolving credit increased in the third quarter at yearly rate of 6.5 percent, while installment debt such as car and student loans, for example grew at an yearly rate of 8 percent.

    With rising interest rates, consumers get find themselves taking a lot longer to payoff debt. However, in 2008, interest rates were near zero in December of 2008.

  2. Like 2008 Americans are Running up Credit Card Debt Again
  3. #2
    Registered User Senior Member
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    192
    I wonder why that is. Usually it is a sign of confidence with their income and job. The unemployment rate has dropped (according to the government).
    So, what is exactly correct.

  4. #3
    Well, interest rates are low, employment is a lot better than in 2008, and the mood is generally more optimistic.

    Add that to all the 0% APR credit card offers, new car financing offers, etc., and it is not hard to see why we are taking on more debt.

  5. #4
    Registered User Semi Pro Member
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    336
    It tends to be a wise choice to take on more debt when interest rates are low and of course if you can afford to do so.

    Americans understand that rates for consumer debt is still low and want to take advantage of it. That is what the wealthy tend to do.

    In addition, with the CPFB looking out for us, we are not getting hosed by lenders on miscellaneous junk fees like before 2008.

    The problem may occur when those loans which are variable move-up too quick compared to one's income. The economy is not in gangbuster mode so that is not likly to be the case either.

  6. #5
    Registered User Semi Pro Member
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    321
    Money, a section of Time magazine, says the average household balance is costing people $6,658, or 9% of income, in interest each year.

    Over the past 12 years, household debt has increased 15% faster than income.

    Some of the reasons are attributed to medical and food costs; each one has easily outpaced wage growth going back to 2003.

    Is mandatory health insurance worsening the pockets of Americans or is food doing the big damage? With transportation costs so low, food prices should not be rising, yet they are.

    Don't buy extra food or organics you won't eat as much. With the low gas prices, credit card debt should not be rising but maybe people are driving more, so more small auto repairs and convenience market pitstops are contributors.

  7. #6
    Registered User Senior Member
    Posts
    120
    I would like not to go through 2008-2009 again. Tough times for me and my family, and a lot of our friends.

    But those stats are pretty disturbing. And then I look at what is going on with housing in my neighborhood, and I think "how quickly they forget".

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