Many people in Michigan and the rest of the country have some level of personal debt. Even if it is solely related to a home mortgage, it is not unusual for the average household to owe someone some money for something. Now, for the first time since 2007, personal debt levels are on the rise in Michigan and the rest of the country.
In all but one of the areas measured in a recent study, debt for items like a car or a home increased at a higher rate than in past years. Credit card debt did the same. The study included numbers pulled from the last quarter of 2013.
Officials say this is a positive economic sign. They claim it indicates people are becoming more comfortable with their incomes and therefore more comfortable increasing their debt load to purchase items they want or need. They say it is possible that the trend toward paying off debt rather than adding to it may be losing popularity.
The study measured several categories when determining debt levels. Student loans presented the highest numbers with a jump that took the category from almost $115 billion to just over $1 trillion. Money owed on credit cards increased by $11 billion. General credit levels went up by nearly $25 billion, which makes a total of over $11 trillion in debt overall. Home equity loans were the only category included in the study that decreased.
Whether this trend is a positive or negative indicator of what is happening in Michigan residents' personal bank accounts remains to be seen. For some, increasing debt levels are a constant source of worry and stress as they attempt to stretch their paychecks to the breaking point just to make ends meet. When even that does not work, and the strain becomes too great, bankruptcy may be a viable option. For many it can represent the first steps in achieving financial peace.
Source: New York Post, Consumers 'put it on the card' during largest debt increase since 2007, Gregory Bresiger, March 1, 2014