This is scary-ville, the fact that we all took on more credit card debt in May of this year since right before the economic debacle in 2008; in fact, the actual date can be pegged exactly: “one month before the Great Recession began” in 2007.
According to an Associated Press report by Martin Crusinger in July, “Americans stepped up credit card use sharply in May,” this increase in credit card debit may be just a flicker of use. Really nothing to get too concerned about, as “Economists say (the increase) was likely a temporary response” to all that is ailing us, like “weaker hiring and poor wage growth.”
Still, more debt is more everything when it comes to making timely payments vs. paying the medical bill—oh, and the grocery haul as well.
Some of the increase in this debt can be labeled as a not-so-bad thing: it points to confidence in areas like automobile and student loans taken out over the past two years with those two categories ringing up $1.7 trillion in May alone.
For the most part, we continue to be fairly savvy when it comes to using credit cards. A look at the spike in card usage shows a big drop off in “credit card debt during the recession and immediately after.”
Nothing good lasts forever, and the credit cards were on high octane to the tune of about $8 billion in May of this year—the total figure of $870 billion for credit card charges was a tad over the “post-recession low hit in April 2011.”
What’s amazing is just how ‘small’ that figure is in comparison to the credit card debt of “more than $1 trillion before and shortly after the recession began.”
The shift to using credit cards more frequently is indeed a factor of our ailing times, what with more workers returning to school, or families shifting household expenses into the abyss of credit card debt; on the other hand, increasing this non-secured debt can be “a healthy sign for the economy…(consumers) are gaining confidence and…more comfortable taking on debt.”