America's Debt Crisis: Consumer Credit Card Debt Continues To Rise

The average American consumer is "tapped out" when it comes to their debt load. As a matter of fact, just about everyone in the world is in the most amount of debt they have ever been in, in history.

As delinquencies and layoffs rise, Americans are increasingly finding themselves in a precarious situation. Already paying a lot in debt repayments, Americans who face a financial burden are already so far in debt they can no longer borrow their way out.  Everything is fine as long as they can make the payments.

According to Bankrate, the number one reason (40 percent) why Americans aren't saving their money is that they have too many other expenses. Interestingly, only 13 percent of those surveyed by Bankrate cited debt as the reason why they're not saving as much as they should. 

According to Forbes, that little tidbit is "interesting" because total U.S. consumer debt, including revolving and non-revolving debt, now stands at more than $4 trillion, the most ever. Have Americans become so delusional that they've stopped thinking of debt as an expense and a chunk of money they have to repay?

Debt is beginning to impact every aspect of American life and culture. It affects us all, but it can seriously hinder workers' ability to retire on time. The more you're on the hook to pay lenders, the less you have to pay yourself. Revolving debt, such as credit card debt, is now valued at more than $1 trillion, which exceeds the all-time high right before the financial crisis.  Student loan debt is also a concern, as it stands at $1.5 trillion.

Regardless of the red flags in the market and economy as a whole, Americans seem all to happy to keep borrowing more money.  Overall consumer debt reached $13.3 trillion in the fourth quarter of 2018 according to Experian.

It has become far to easy to borrow money and there is a good chunk of Americans that will never be able to pay back what they've promised. Debt often destroys your ability to keep your word.  Most Americans overspend and lack the very basic self-control needed to have a massive amount of credit available to them.  This is more than obvious when looking at the spending behaviors of those in our own neighborhoods.

The harsh lessons of the Great Recession a decade ago have already been forgotten.

Americans with some student loan debt, credit card debt, car loans, and payday advances are normal now.  Living paycheck to paycheck is the new normal for most Americans, and as debt and taxes eat away at the middle class, too many are not at all concerned with their poor decisions regarding money.

According to Payments Journal, while the accumulation of credit card debt slowed, it did not halt, which signals that Americans are still stuck in the consumer mindset as opposed to the saver one While many Americans owe more in mortgage and student debt than any other type, they also carry credit card, auto, and medical debt, the latter of which is the number one cause of personal bankruptcy filings in the country.

And while the economic data has been weaker than expected, consumer confidence remains high.  This confidence is also a bit concerning considering the rapidly snowballing "retail apocalypse" we are all living through right now. Perhaps what's most alarming is who confidence rose among...

The March gain in the Sentiment Index was entirely due to households with incomes in the bottom two-thirds of the income distribution, posting a gain of +7.1 Index-points, while households with incomes in the top third fell by 1.1 Index-points. So, basically, the wealthy have been feeling the need to save more and spend less while those who earn less are feeling confident spending more money.

Payments Journal further reported that the takeaway is this: growth is still healthy, though credit unions have outpaced banks in growing their credit card portfolios. But, delinquency outside top issuers deteriorated. It is likely a good time to trim back some growth, or at least tighten standards beyond the realm of top credit card issuers.

Making it harder for Americans to rely on debt is a good thing, but while so many are still wanting to borrow money they have not yet earned, it makes it tough for creditors to reign it in.  Reliance on debt for daily living is a problem that will eventually need to be grappled with.  But for now, everyone seems content to kick the can down the road.

Originally published at SHTFplan.com - reposted with permission.