Americans are adding to their credit card balances, according to data released from the United States Federal Reserve. The revolving debt data comes from the Federal Reserve member financial institutions, which reported the nation's credit card debt to be at $870.2 billion as of the end of May. That number adds $8 billion to the statistics from April, making this the highest monthly increase in more than four years.
The numbers have been rising for over a year, which is a change as compared to the overall debt numbers since the beginning of 'The Great Recession' in October 2008. Prior to the most recent financial troubles, credit card debt in Michigan and across the nation was at record highs in the early-to-mid 2000s. At one point, in July 2008, the statistics put total credit card debt at a staggering $1 trillion.
Immediately following the beginning of the financial crisis, banks quickly moved to charge off their credit card debt. Many consumers did the same thing trough filing for bankruptcy and debt settlement agreements. Lenders adjusted lending standards and placed a number of restrictions on the availability of new credit. The result: a shrinking of total credit card debt by over $150 billion over a three year period.
For Michigan consumers, high levels of debt can lead to an increasingly uncomfortable financial picture. A shrinking job market has left many families struggling to pay for essentials, and unable to adequately manage their debt load. The best approach to gaining control over your financial health is to take an honest assessment of your income, assets and liabilities. Many individuals and families can find a debt reduction solution that can help them to recover from high credit card debt. For others, bankruptcy may offer the best solution to getting back on their financial feet.
Source: InsideArm.com, "Credit Card Debt in May Grows at Fastest Pace Since Recession," Patrick Lunsford, July 10, 2012