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Consumers spend billions for credit card debt, interest

On Behalf of | Nov 15, 2018 | Credit Card Debt, Firm News

American consumers seem to be confident in their spending habits, but is the upwards trend sustainable? According to some experts, probably not. Consumers in Florida and across the rest of the United States are currently shelling out over $100 billion not in general credit card debt, but for the interest and fees on their cards alone.

During the second quarter of 2018, total outstanding debt for credit cards reached $829 billion. While spending might indicate a boost in consumer confidence, it could also showcase a serious problem. Personal income only rose by 0.2 percent in Sept. 2018, which was the smallest increase in income since June 2017. Not only has income rise slowed, but savings rates are also on a downward trend.

And yet, spending is going up for many consumers. With a recent report showcasing a 0.4 percent increase during Sept. 2018, it caps off seven months of spending gains. Some of the categories that saw spending increases include health care, recreational goods and vehicles.

An increase in spending while income growth slows or falls stagnant can indicate a troubling future to come. In many cases, Florida residents do not choose to purposely outpace their earning potential, but life can sometimes get in the way. Whether forced to fork over more for health care or faced with the monumental monthly costs of maintaining a vehicle for traveling to work or school, credit card debt can quickly spiral out of control. In such cases, bankruptcy might help those struggling with their debt to find a better solution to their financial problems.

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