Recent data has shown that Americans are slowing the increase of the growing consumer debt. In March, seasonally adjusted spending on credit cards still increased, but less than it has over recent months, suggesting to some experts that Americans are being more cautious before deciding to pay for items using their credit cards.
The data also showed an increase in car loans and student loans, although there is no available breakdown to distinguish between the two. Experts say that about 80 percent of loans in that category are likely to be student loans, many of which are being taken out by people who have been unable to find work and have instead returned to school for additional training.
Student loans have been on an upward trajectory in the aftermath of the recession as unemployed Americans seek a brighter future. And while seeking a better education to help improve job prospects is one way to improve the overall financial health of a family, it is also true that some private student loans come with high interest rates and harsh repayment terms. However, unlike credit card debt, student loans are difficult or impossible to discharge during a bankruptcy proceeding.
Credit card debt, while associated with much higher interest rates, is more easily reduced or discharged during the bankruptcy process. While this is not an ideal solution for most Florida families who are struggling to make ends meet in this lagging economy, it is one way to get a fresh start and to end the stress of being perpetually behind on payments.
Source: USA Today, “Consumers cut back on credit card use in March,” May 7, 2013.