Credit card debt is increasing, but it is doing so at a slower pace. According to the CardHub.com study on the second quarter of 2013, consumers in the United States added $17 billion in credit card debt. However, even with the increase, it still represents a slower pace of increased debt.
According to the CardHub.com study, the build up for the second quarter of 2013 was 3 percent smaller than what was seen in the same quarter of 2012, and 12 percent smaller than what was seen at the same time of year in 2011.
As a society, our relationship debt seems to be in flux. At least, it appears that things are returning to pre-recession levels at a slower pace.
How Do You Feel About Debt?
During 2011 and 2012, credit card debt increased at a faster pace (at least in quarter two) at a faster rate than in 2009 and 2010. In those years, the recession and the financial crisis were still relatively fresh in the minds of consumers, leading them to pay down debt, and try to avoid racking up credit card obligations.
However, by 2011 and 2012, many consumers were feeling more confident about the economic situation, and were starting to use debt again. The latest numbers, though, suggest that perhaps consumers aren’t so sure that the worst is quite over. While credit card debt is increasing, the pace has slowed.
With concerns about the economy on the rise, and many Americans wondering if we are going to see another financial crisis, it seems as though adding to household debt isn’t something that many want to risk. This makes sense.
These types of reports seem to emphasize the fact that Americans are more willing to take on debt when they feel confident about the situation. When you feel as though you can make payments, and that you will be able to pay your debts eventually, you are more likely to be comfortable with adding to your credit card debt, carrying a balance. However, a poor economic situation tends to destroy confidence, and encourage people to reduce their obligations as quickly as they can.
What’s Next for the Economy and Credit Card Debt?
The CardHub.com report reduced its estimate for total credit card debt increase for 2013. Originally, CardHub thought that there was likely to be a $47 billion increase for the year, but after the trend seen in the second quarter, that estimate has been revised to $41.2 billion.
This indicates that, perhaps, consumers don’t feel particularly comfortable with what is happening right now. I’m especially interested to see what quarter three numbers show in a few weeks. With worries about the debt ceiling battle and with political grandstanding, it really looks as though there could be more reasons to worry about the financial future. Consumers are likely slowing their debt purchases and shoring up their situations right now.
In fact, even I’ve started thinking about my cushion, and trying to make sure that everything is in order with my finances. There are some rough times ahead, I think. Are you ready for what could be next?
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