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Credit-Card Debt Is on the Rise Again


After a few years of austerity, credit card debt is rising again. According to data released this week by credit-card comparison web site, consumers racked up $18.4 billion in credit card debt during the second quarter of 2011, 66% more than what they amassed during the second quarter of last year and more than four times what they did two years ago.

At the current rate, consumers are on track to end the year with $54 billion extra in credit card debt, following a $9 billion increase last year. That suggests consumers are amassing credit card debt at a faster rate than ever, says Odysseas Papadimitriou, chief executive at

This spike, however, occurred while the economy was still on the upswing and consumers were feeling relatively good about their financial outlook. That has changed in the last few months, and the volatility in the stock market and unpredictability in Europe could cause consumers to reverse course in the third quarter, says Papadimitriou.

On the other hand, the stubbornly high unemployment rate could also be contributing to rising credit-card debt, especially for the long-term unemployed who exhausted their unemployment benefits and were relying in part on their existing credit cards for basic necessities.

At least carrying credit-card debt is less dangerous than it was prior to the Credit CARD Act that went into effect last year. In part, the legislation prevents issuers from raising interest rates on existing credit-card balances as long as borrowers aren’t two or more months late with their payment. If the economy dips again, simply paying the bills might be burdensome enough.


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      There comes crash of illusions the similar overestimated accounts are replaced
      Opposite “a pessimism error”, leading to that investments,
      Which in the conditions of a full employment could bring 2 % actually,
      Are considered as unprofitable. And sharp reduction of the new following from here
      Investments conducts to unemployment, and then the investments, capable to bring at
      Full employment of 2 %, really yield only the loss. We appear in
      Such position when it is available defect of dwellings and when nevertheless nobody
      Presumes to live in available houses. Thus, in the conditions of boom
      Lower norm of percent (133) is necessary no more high, and. Last gives
      Possibility to support a condition of so-called boom. Effective
      It is necessary to search for means of struggle against business cycles not in removal of boom
      And an establishment of chronic semidepression, and in eliminating crises and
      Constantly to support a quasiboom condition.
      The boom to which can end with crisis, is generated, thus,
      Norm of percent which at correct accounts on the future would be too
      It is high for a full employment, and at wrong assumptions (until then
      While to them adhere) would prevent to show to this norm of percent the
      Constraining influence. The boom is a condition, at which overwork optimism
      Gets the best of the norm of percent too overestimated at more sober estimation.
      If to exclude the war period * hardly probable we had lately
      Any boom, so strong that it has led to a full employment. In
      The United States employment in 1928-1929 was rather satisfactory
      From the point of view of usual standards. But I do not find that there at this time
      Defect of a labour, behind an exception, maybe, workers would be felt
      Few specialised trades. In some branches were formed
      “Bottlenecks”, but as a whole volume of output still could extend. Not
      There was also redundant investments in the sense that, for example, a condition and
      The equipment of dwellings was such, when each under condition of a full employment
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    • This is a common prelbom, because many schools require students to file the FAFSA early (often February 15), but most people haven’t even thought about filling out their 1040s by then.You are allowed to estimate the numbers on your FAFSA if you don’t know exactly what your 1040 is going to look like. Sit down with all your paperwork and plug your best-guess numbers onto your 1040. Then file your FAFSA using these estimates.Now it’s important to remember that later you will receive a document called a Student Aid Report on which you will be asked to verify your FAFSA information. When you have the correct numbers from your 1040, you need to make corrections on you Student Aid Report and send it back to the Department of Education. If you don’t, you run the risk of being flagged for verification proceedings by your school’s financial aid office, which is a pain that you should avoid if possible.Next year, make a point of getting your tax information together early and you’ll be able to file both your FAFSA and your 1040 early without having to go through the headache of estimating.alot of experience

    • Love this post and have lots of conversation ponits from it.First, your post raises some very important questions about the responsibility businesses have to their potential customers. My initial reacting is: Why would any business, credit card company or other, lend money to someone who has no means to pay it back? If you own a restaurant, would you repeatedly serve a meal to a customer who came to you day after day saying that she had no money to pay you? Probably not; your restaurant is a business, not a charity. A person with no reportable income of his or her own is, essentially, asking a credit card company to trust that she will find the means to repay the money she borrows. However, her ability to find those financial resources and repay the borrowed funds is determined by her personal relationships with financiers (perhaps a spouse). A credit card company is a business; why should that business take risks based on a individual’s faith in her personal relationships? She assumes she’ll have the money to repay her loan, but situations change. Point: it would be unwise for a credit card company to gamble on a potential customer’s feelings and faith in her financier. The onus is on the customer to prove her ability to repay a loan not on the company to take a leap of faith (in millions of customers who wish to charge thousands of dollars each). Second, a major issue here is how women share financial assets with their spouses when they have no reportable income of their own. When it comes to sharing finances between spouses, it’s important to remember that a marriage is a contract. One may sign that contract with the expectation that a partner will uphold his or her end of an agreement, including a financial agreement to share assets, but contracts and agreements are often broken. A broken contract or a spouse simply not upholding his or her end of a financial agreement within a marriage can, unfortunately, leave the other spouse in dire financial straights even if he or she has an income-producing job. Facts we all know: through divorce, a spouse may lose perceived financial security and assets. Through deception, a spouse may end up with a damaged credit score and empty savings account. This can happen to both parties the one with the reportable income and the one without. Therefore, it may be unwise to rely on a spouse for complete financial support. However, a universally wise thing to do when sharing finances is to put into place a full-proof financial plan that lets both spouses meet their individual financial goals. Those goals are not universal; they vary from couple to couple. For example, shared accounts may be right for some couples, but they may not meet the needs of others. Having both names on the deed to a house might be right for some, but not right for others. Being an authorized user on a spouse’s credit card may be perfect for some, but not enough for others. Point: it’s important for individuals to determine what’s okay for them and to make choices that support their convictions.Finally, when it comes to relationships, men and women need to keep in mind that a relationship is only good when it’s good for both parties mentally, emotionally, spiritually, and, yes, financially. Yes, some women view their choices to be Stay At Home Moms as sacrifices that come with unfortunate financial consequences. To that, I say: every choice has a cause and effect. To more easily control the effect, make sure you make the best choices for your situation. Okay Jess your turn!

    • Great, more spending of money people don’t have. I’m sure it’s good for the businesses selling them things, but it sure makes it seem that lessons were not learned.

About Pay Dirt

  • Pay Dirt examines the millions of consumer decisions Americans make every day: What to buy, how much to pay, whether to rave or complain. Lead written by Quentin Fottrell, the blog examines these interactions, providing readers with news, insight and tips on shopping, spending, customer service, and companies that do right – and wrong – by their customers. Send items, questions and comments to or tweet @SMPayDirt.