Credit card debt increased in second quarter
Recently, the U.S. Federal Reserve reported that consumer credit card debt decreased in July. However, that report also contained less positive news: the second quarter of 2011 saw a significant increase in credit card debt in the United States. At the current spending rate, it is projected that 2011 will end with over $50 billion more in credit card debt than when the year began.
According to CardHub.com, consumers incurred more than $18 billion in credit card debt during the second quarter, which included the months of April, May and June. The increase came after a decrease in credit card debt during the first quarter of the year.
While this is not an uncommon trend, analysts are troubled by the increase in credit card use during the second quarter as compared to the same quarter in recent years. The total credit card debt incurred this year was 66 percent greater than the second quarter of last year, and a staggering 368 percent greater than 2009.
However, analysts do not believe that consumers are incurring debt through frivolous spending. With the increase in gas and grocery prices, consumers are likely having to put those and other daily necessities on credit cards.
Chapter 7 bankruptcy is a valuable tool that allows debtors to permanently discharge several forms of debt, including credit card debt. If this rise in credit card use continues, it is likely that the number of Chapter 7 filings will also increase as people in Georgia and across the country are forced to use their credit cards to pay for necessities such as gas and groceries. If you are no longer able to make your credit card payments, consider contacting a bankruptcy attorney to discuss your options.
Source: Consumer Affairs, “Consumers Pile Up Second Quarter Credit Card Debt,” Mark Huffman, Sept. 14, 2011