We noted in a recent blog post that, although credit card debt collectively owed by Americans is currently down from its all-time peak of a few years ago, a clearly discernible trend now shows that such debt is once again rising. We queried in our blog post dated November 19, 2014, whether that was bad news, good news or essentially a non-starter at all as a news item.
Steady card use at some level is of course good and necessary, with healthy spending on cards (however that might be defined) helping to fuel economic growth through new purchases and job accretion, resulting in a repetitive spiral that drives the economy upward.
Recent findings from credit card search and comparison websites, though, coupled with remarks from inside commentators on the credit card industry, show troubling signs that credit card use is once again becoming problematic for many consumers.
One of those companies — Cardhub — points to a sharp spike in new card debt at the end of 2014 as compared with what was collectively owed on cards at the conclusion of 2013.
And Creditcards.com, another card research entity, recently released survey results indicating that about 18 percent of American consumers believe they will never be free of debt. That level of cynicism is also up markedly from 2013.
Household debt “has steadily trended upward in recent quarters” says a senior banking official.
If most of that debt is owed by consumers with steady job prospects and a continuing income stream, and is not being accrued to pay for essentials like food and housing, some of what cynical commentators are implying about a future fallout might reasonably be discounted.
If, however, many Americans are reaching their card limits on such purchases and are becoming unable to make minimum payments, a high degree of concern is indeed warranted.
Time will tell.