Disturbing Trends in American Credit Card Debt

There are two disturbing trends that appear to be taking class with American credit card debt today. The first unfortunate trend is that people seem to have an increasingly level of debt as compared to the amount of debt that they had at this time last year. This is probably caused by the problems occurring in the economy today. The second trend (which might arguably be even worse) is that more people are late on their credit card payments now than were late on them at this same time last year. These trends indicate that people may have debt problems that are starting to get out of control which could mean additional problems for the American economy in the not-too-distant future.

The problems with today’s economy are causing people to be unable to stretch their dollars as far as they could just one short year ago with the most obvious culprit being the rising cost of fuel that people are dealing with today. The fact that people are earning the same amount of money as before (and sometimes even less than they were earning before) but that they are facing a higher cost of living in terms of basic needs like fuel and food is causing people to borrow the money that they need to have in order to get those needs met. This means that people are accumulating more debt which they are having trouble paying off. One study shows that there has been an increase of over eight percent in the average American’s debt in the past year.

The problem is exacerbated by the fact that these people don’t actually have the money to pay back that debt. That’s why they are borrowing it in the first place. The result of this problem is that they are getting later and later on the payments that they owe to their credit card companies. This actually increases their debt in the form of late fees and interest rate hikes. Over one percent of credit card holders are more than ninety days delinquent on their bills! Although one percent seems like a small number, that’s a lot of people that haven’t paid their credit card bills in the past three months.

These are problems that don’t just impact the individual borrowers who are suffering from the money issues. They impact the areas in which these people live. (Some areas are better off than others with North Dakota, Vermont and Utah doing fairly well with their debt and Florida and Nevada being the states that are worst off in terms of delinquent debts.) These problems also impact the general U.S. economy and could lead to additional problems for all credit card borrowers in the near future.