Better Business Bureau Accredited
According to a Federal Reserve report released on August 7, consumer credit card debt increased dramatically in June, 2006.
Total consumer credit, which includes credit card debt and other non-mortgage loans to consumers, rose to $2,186,200,000,000 in June-an increase of $10.27 billion over May and of $26.5 billion since the end of the first quarter.
The declining real estate market is undoubtedly one factor in the increase. With real estate values declining and interest rates rising, mortgage refinancing is not the ready option it was in the not-so-distant past, and consumers may be forced to look at costlier alternatives.
The millions of adjustable rate mortgages that are reaching the adjustment point may also have an impact, since many homeowners have seen a drastic increase in their monthly bills as a result of the adjustment.
Revolving credit card debt alone rose $9.8 billion on June, that in addition to an increase of $7.42 billion in May. Consumers are paying an average of 13.14% interest on that debt, up from 12.76% a year earlier.
The bottom line: consumers are borrowing more money and incurring more credit card debt at higher interest rates than a year ago, or last quarter, or a month ago. The average consumer debt burden has grown to $17,676/household, not including mortgage and home equity debt.
Meanwhile, economic growth has slowed to a crawl. Some financial experts express concern that consumer credit card debt is climbing in conjunction with high gas prices and slow economic growth, fearing this indicates that more consumers are in a financial bind, unable to absorb the rising transportation costs.
If that perception is accurate, it could mean a significant increase in the already rapidly-increasing rate of consumer bankruptcy filings across the country.
The long-term impact of the growing debt burden for American families isn't yet clear, but one thing does seem clear: the decline in bankruptcy filings as compared to the same period in 2005 is not due to greater economic security among consumers. As credit card debt and interest rates rise.
PAID ATTORNEY ADVERTISEMENT: THIS WEB SITE IS A GROUP ADVERTISEMENT AND THE PARTICIPATING ATTORNEYS ARE INCLUDED BECAUSE THEY PAY AN ADVERTISING FEE. It is not a lawyer referral service or prepaid legal services plan. Total Bankruptcy is not a law firm. Total Bankruptcy does not endorse or recommend any lawyer or law firm who participates in the network. It does not make any representation and has not made any judgment as to the qualifications, expertise or credentials of any participating lawyer. No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. The information contained herein is not legal advice. Any information you submit to Total Bankruptcy may not be protected by attorney-client privilege. All photos are of models and do not depict clients. All case evaluations are performed by participating attorneys. An attorney responsible for the content of this Site is Kevin W. Chern, Esq., licensed in Illinois with offices at 25 East Washington, Suite 510, Chicago, Illinois 60602. To see the attorney in your area who is responsible for this advertisement, please click here, or call 866-200-8052.
If you live in Florida, Mississippi, Missouri, New York or Wyoming, please click here for additional information.
By an Act of Congress and the President of the United States, we are a federal Debt Relief Agency. Attorneys and/or law firms promoted through this Web site are also federally designated Debt Relief Agencies. They help people file for relief under the U.S. Bankruptcy Code. Disclosures Required Under the U.S. Bankruptcy Code.