Evidence suggests that consumers across the country, including those here in Florida, could be returning to pre-recession spending habits. Where this could be an indicator that the economy is back on track, it could also be a cause for concern. Credit card debt is rising at an alarming rate, and some are worried that trouble could be ahead.
In the fourth quarter of 2015 alone, Americans increased their credit card debt by $52 billion. The total amount of credit card debt amassed last year was $71 billion. Therefore, the majority of this debt was incurred in just three months.
Others point out that 2.45 million jobs were created last year, and an additional 400,000 jobs were created through February of this year. They go on to say the fact that more people are working could account for the increase in consumer spending. However, wages have not increased with the creation of those jobs. In fact, February numbers indicate that wages actually decreased three cents an hour during that month. Rising debt and stagnant wages could be the recipe for another economic downturn.
The implications for the economy could be disconcerting, but the impact on individuals could be devastating. Rising credit card debt could be an indication that many people are having trouble making ends meet and need credit cards to supplement their income. Florida residents could find themselves overwhelmed by debt before they realize it. Debt relief options such as bankruptcy are available, and many people may benefit by exploring their options before the situation becomes critical.
Source: CNBC, “US credit card debt balloons to $917B: What it means“, Fred Imbert, March 10, 2016