Borrowing throughout the United States, including in Florida, spiked by more than 10 percent in April. The increased use of credit cards is an indicator that the economy is rebounding from the 2008 recession. However, it’s also sparking fear that a credit card debt bubble -- much like the housing bubble burst that contributed to the recession several years ago -- is on the horizon.
The fact that consumers are spending more means that an economic boom is possible and that Americans have become more confident. However, the issue is that incomes for most American families remain stagnant or are declining, whether they are working-poor or middle-class families. Many people are having to resort to using credit cards to accommodate today’s increasing gas and food prices.
Many people are also saddled with student loans as well as vehicle loans, as they need cars to get to and from work. They are also taking out emergency loans, since they are not able to save up enough to build adequate emergency funds. Another problem is that credit card interest rates are rising, averaging nearly 16 percent. Those with credit scores that are considered “excellent” are paying interest rates near 13 percent.
Credit card debt can easily drain a person’s wallet and energy, with the person feeling as though he or she will never achieve success in combatting it. However, personal bankruptcy is usually a responsible way of addressing this and other types of household debt that has become too much to handle. Through a bankruptcy filing in Florida, an individual can discharge most, of not all, of this insurmountable debt and be free to begin again financially.
Source: minyanville.com, "Credit Card, Household Debt May Be The Next Bubble To Burst: How To Protect Yourself", Carol Kopp, June 26, 2014