A consumer finance web site has reported that consumers in Arkansas and nationwide racked up an impressive $33.4 billion ticket in total credit card debt in the second quarter of 2016. The rapid pace of credit card debt accumulation puts the consumer population on a pace to achieve a record of $1 trillion of such debt by year’s end. The situation is becoming reminiscent of the 2008 financial crisis that capped a kind of national frenzy of consumer spending and borrowing, rather than saving.
The second-quarter tally above-mentioned was actually the highest report of credit card debt since the recession that began in 2007. One ominous sign on the financial horizon is the current trend of the Federal Reserve toward a pattern of interest rate increases. If that trend continues, credit card debtors will find their payments jumping higher and their pocketbooks getting strained even tighter.
The indications are that there will be an impending increase of defaults on credit card debt. That usually happens when the national debt load for this kind of financial obligation increases. Several consumer credit counseling experts in the field have expressed the opinion that there could be a credit card disaster that hits the American economy.
Reliable debt counseling agencies are predicting increasing numbers of consumers, including a fair share in Arkansas, who will be looking for debt relief in 2017. When credit card debt goes through the roof, there appears to be a direct correlation not only with increased credit counseling clients but also with significantly more bankruptcy filings. The more critical and over-extended a family’s credit card debt becomes, the more likely it is that simple credit counseling will not be able to relieve the increasingly harsh debt collection pressures placed on the debtors. In that event, bankruptcy usually proves to be the strongest and speediest way for an individual or married couple to find a way to recover and get a fresh start.
Source: toledoblade.com, “Consumer debt soars to levels seen in 2008“, Randy Tucker, Sept. 30, 2016