Credit Card Debt – Paying the Piper!
Did you know the newest version of Monopoly has incorporated credit cards for a reason? Americans, now, more than ever, rely on credit as a means of every day purchasing power. Every year, the average amount of credit card debt for the American family reaches higher and higher. It used to be that people in debt were laboring under thousands of dollars of student loans or a hefty mortgage. As of late, though, the numbers that land among the stars come from credit card debt. Families chasing the American dream wind up spending way more than they can afford on houses, cars and other big ventures, only to make it up in credit card debt.
This financial habit has become more and more common as the stigma associated with high amounts of credit card debt has faded away. While in the past, it may have seemed absurd to have $10,000 in debt on one credit card, but now, it‘s seen as acceptable. This does not make intuitive sense, as interest rates continue to move upward! Fiscal responsibility is not a priority for Americans today. It’s more important that kids get into the best pre-school, even if that, in combination with groceries, gas, and other payments winds up maxing out cards beyond feasible repayment.
So what does tomorrow credit card debt look like?
A major concern of financial analysts is that this kind of behavior is going to push a receding economy over the edge. Not in the habit of analyzing national economic trends, many consumers fail to see things from this perspective. Sure, Americans wish their debt could be lessened. However, until the next to impossible task of getting consumers to think about the impact such a national trend has on the economy can be accomplished, it is unlikely that people will stop getting themselves into such high levels of debt.
The other question is how sustainable is the growth of individual credit debt? If the average amount of consumer debt that exists right now is at a debt ceiling, then there is a chance that things will get better soon. Some people believe, though, that as long as those extending credit can continue to profit off of irresponsible consumer spending, credit card debt and credit limits will continue to grow and people will continue to max themselves out. While this may make interesting fodder for an economic talk show, the soap opera in real life credit card debt is not quite as entertaining.