Credit Card Debt Increases Significantly
Americans are borrowing and charging much more, according to the latest Federal Reserve G19 report released Jan. 9.
Consumers increased their overall borrowing by $20.4 billion in November, the largest increase in ten years. Many analysts believe this is a sign Americans are feeling better about the economy.
However, there could also be some red flags in this latest report.
Biggest Jump Since 2008
Revolving credit, most of which is credit card debt, increased at an annual rate of 8 1/2 percent and grew for the third straight month. The $5.6 billion jump represents the largest gain since March 2008.
"This is a big jump in credit card debt, and these are November figures," says Bill Hardekopf, CEO of LowCards.com. "With the strong holiday sales, we will likely see another increase in December during the peak of the shopping season. While this increase may be good news for retailers, it also means that consumers will soon be getting credit card bills with much higher balances.
“Consumers can't get lured into running up more credit card debt if they can't afford to quickly pay it off. Increasing credit card debt is not a trend to be carried over into the new year."