New data shows uptick in credit card debt

Millions of Americans, including many in northwestern Mississippi, use their credit cards on a daily basis. Some of these people charge non-essential items like new televisions, clothes and furniture to their cards. Others, however, fall back on their credit cards as a means of covering for monthly expenses like groceries and household bills. This has been especially true during the past few years where people have faced financial challenges due to the difficult economic environment.

In recent months, the economy has been growing steadily and the number of people facing unemployment has slowly declined. Experts say that these conditions have fueled more credit card spending across the country. Recently, the Federal Reserve released its latest report on consumer credit. The data showed a whopping 8.3% annualized jump in total consumer debt from April to May.

According to a senior director at Moody's Analytics, the biggest surprise in the numbers was a large rise in credit card debt. While student loans and auto loans still represent the biggest portion of consumer debt, credit card balances rose significantly from April to May. The director at Moody's noted that it was the largest gain in credit card balances since the economic recovery began.

A better employment picture and increased consumer optimism may be the driving forces behind the rise in credit card debt. But for many people, their consumer debts are already overwhelming. Any kind of unexpected circumstance like a job loss or an illness, can trigger financial difficulties. Debts can pile up to the point where making just the minimum monthly payments becomes an impossible task.

Anyone whose debts are spiraling out of control should look into all of their legal options, including bankruptcy. Whether the person has accumulated his or her debt because of some life change or simply through outspending his or her means, bankruptcy can be a reasonable path toward a fresh financial start. Nobody should have to spend the rest of their life bogged down by credit card and other consumer debts.

Source: USA Today, "Consumers break out the credit cards in May," John Waggoner, July 8, 2013

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