The American economic landscape is still marred by the effects of the recession that began in 2008 and is only now beginning to right itself. That does not stop Michigan residents and Americans across the country from continuing to rack up credit card debt, however. Current trends indicate the average citizen is still spending just as much as ever, which has the potential to lead them down a damaging fiscal path.
A debt study conducted by CardHub has indicated that Americans had begun to pay back their first-quarter debts by the time the second quarter hit. Since then, they have incurred a staggering $17 billion in new debt, effectively erasing half of the surplus from the previous quarter. Experts are unsurprised by this turn of events.
According to financial experts, this cycle, which they call "pay down, ring up", has remained a consistent behavioral pattern in American consumers since the recession began in 2008 and possibly even before. Even worse, the debt incurred in the second quarter of this year is up 75 percent when compared to the same quarter in 2010 and 80 percent from 2008. This trend suggests Americans will end out the year having incurred $41.2 billion in new credit card debt.
Credit card debt is a trap not easily escaped. In the current economic climate, many people are turning to credit in order to make ends meet, or else they are living above their means thanks to a lack of understanding of how debt operates. Michigan residents buried under credit card debt are urged to seek support in restructuring that debt and working towards a healthier financial future.
Source: bizjournals.com, American consumers ring up $17 billion in new credit card debt in second quarter, W. Scott Bailey, Sept. 10, 2013