Call Now!
Call Us 414-326-9231 608-260-7133 Text Us 414-326-4709

Spike in credit card debt could result in future bankruptcies

During the aftermath of the economic recession, many Americans put away their credit cards and drastically cut back their spending. Many Wisconsin residents saw their neighbors lose their homes to foreclosure or lost their jobs and simply didn’t feel comfortable using credit cards as frequently for purchases.

However, in recent years the economy has made improvements, the unemployment rate has dropped and people are feeling more financially secure. As a result, new data shows that consumer debt spiked in April, reaching over $5 billion for the first time in more than half of a decade.

What that means is that Americans are once again less hesitant to pull out their credit cards for purchases large and small. While some people point out that this is a positive sign for the economy, experts are quick to point out that there is a darker side to credit card use.

A finance and economics writer explained that credit card debt is temporarily good for the economy, but it is not sustainable for economic growth. That’s because when consumers rely on credit cards for purchases they often have to cut spending later to pay back the debt along with high interest rates.

Additionally, credit card debt is one of the leading reasons Americans file for bankruptcy protection. For many people who file for bankruptcy because of credit cards, the debt spiraled out of control and reached a level that was impossible to pay back.

With the recent spike in credit card use, it is likely that some people in Wisconsin and the rest of the country will get in too deep with debt and will depend on debt relief options such as bankruptcy for assistance.

While no one wants to go through bankruptcy, it can be the only option and can provide a fresh start to Americans who desperately need it.

Source: Reuters, “Consumer debt spiked in April,” Shane Ferro, June 10, 2014

No Comments

Leave a comment
Comment Information
Email Us For A Response

Free Case Evaluation

* indicates required field

Miller & Miller Law, LLC
  • VISA
  • Master Cards
  • Discover
Milwaukee Office map Madison Office map Kenosha Office map

633 W Wisconsin Ave, Suite 500
Milwaukee, WI 53203

Phone: 414-312-6581
Fax: 414-277-1303
Milwaukee Office

2810 Crossroads Drive
Suite 4001
Madison, WI 53718

Phone: 608-260-7133
Madison Office

6123 Green Bay Road
Suite 210
Kenosha, WI 53142

Phone: 262-326-1669
Kenosha Office

Appleton Office
4321 W. College Ave.
Suite 200
Appleton, WI 54914

Phone: 920-280-3838
Appleton Office

Brookfield Office
200 S. Executive Drive
Suite 101
Brookfield, WI 53005

Phone: 262-261-0665
Brookfield Office

Glendale Office
6333 N. Green Bay Avenue
Glendale, WI 53209

Phone: 414-973-8662
Glendale Office

Fax: 414-277-1303 - We also have offices in Appleton, Glendale and Brookfield to better serve you.