Data Hints at $20 Billion Credit Card Debt Increase in 2011 - Page 2
What many people fail to realize, however, is that their spending should never return to pre-recession levels. Prior to the recession, the incomes of many were either directly or tangentially linked to the now-infamous housing bubble. Now that the bubble has popped, it would be impossible for certain demographics – from mortgage brokers and real estate agents to your Average Joe who leveraged a home equity line of credit – to sustain their previous expenditures without overleveraging once again.
The fact that we are allowing the return of untenable expenditures is indicative of the overall state of financial literacy in the U.S. According to the NFCC, 41% of consumers grade their personal finance knowledge at a “C” or worse and almost three quarters are concerned about their finances.
The $20 billion debt increase projection is just that, however, a projection. It needn’t be the fate of consumers if we make a concerted effort to avoid piling on more debt throughout the remainder of the year. As long as we realize that our spending cannot return to where it once was and understand the importance of paying our bills in full every month, we will avoid the high cost of interest and the stress that comes with revolving debt.