Over the past few years, the struggling economy has impacted millions of Americans nationwide. Consumers have, for the most part, stopped making large purchases and tightened their purse strings when it comes to spending.
Now, it seems the tide has turned as consumers appear ready to buy again as the country’s spending habits are beginning to rise.
The Federal Reserve recently reported that outstanding credit card debt will reach a record-breaking $1 trillion in 2016. This is up from the all-time high of $1.02 trillion, which occurred in the summer of 2008. This is around the same time that America’s financial crisis struck hard.
Consumer confidence in the economy may be the reason for increased spending. Individuals who feel secure in their work and earn steady incomes are far more likely to apply for and shop on credit, because they know they will be able to pay their monthly bill.
Additionally, you’ll be happy to know that banks have been striving to boost their bottom lines and attract new customers with astoundingly low interest rates and better rewards programs.
However, lenders are also striving to increase profits by targeting individuals with less than desirable credit. Of the new credit cards issued this past year, many went to individuals who otherwise would have not qualified for credit lines at the height of our economic recession.
As consumer spending rises, though, it appears the amount of saving is on the decline. In 2008, consumers saved money at an average rate of 4.4%. During the peak of the recession, this number rose to over 11%, on average. Today, the saving rate seems to have plateaued around 5.4% of individuals’ incomes. Though these statistics indicate that our economy is indeed, recovering, you should still be cautious and avoid biting-off more than you can chew when accepting credit offers. Much of the Nation’s economic troubles stemmed from creditors lending and borrowers accepting lines of credit that they could never afford to pay off in the long term.
If you are unsure whether to accept a line of credit, behind on your bills, having trouble managing your debt or have any other collection matter, you need the help of a knowledgeable consumer rights attorney. At Fitzgerald & Campbell, our attorneys have decades of experience successfully counseling debtor clients, representing consumers against collection claims and all other types of debt defense issues, and we are here to help you!