Debt Is A Trap

According to reports from the Federal Reserve, Americans’ credit card debt increased 6.7% in the first quarter. Defaults and delinquencies are adding to the economic woes forcing credit companies to tighten the qualification processes and guidelines. The average American’s unsecured debt primarily made up of credit cards, increased over $4,000 in a year to a whopping $29,300. The use of credit cards for basic needs is becoming common as living expenses increase and wage increases seem non-existent.

The number of credit cards issued has been increasing steadily since 2006. Individuals are looking for rate deals to transfer existing balances and also as the cards reach their maximum credit limits, they need replacements to keep up with their spending. Short term affects of these concerns are minimal in comparison to the long term economic impacts. The economy will continue to be affected at an increasing rate until a balance is reached between household income and spending.