U.S. Consumer Credit Rose By $5 Billion In May, Marking New Realities for Consumers in Debt

Submitted by Jen Jones on Fri, 07/15/2011 - 1:14pm

U.S. Consumer Credit Rose By $5 Billion In May, Marking New Realities for Consumers in Debt

According to last week’s Federal Reserve report, U.S. consumer credit rose by another $5.08 billion in May--a figure that suggested a willingness for millions to keep borrowing despite an exceptionally tight job market.

In a recap of these new figures by Reuters, the news agency said, “The May rise, coming after a revised $5.67 billion increase in April, handily topped forecasts by Wall Street economists for a $4 billion increase and marked the eighth straight month of growth in consumer credit. The total of all consumer credit outstanding in May was $2.432 trillion, up from a total of $2.427 trillion in April. The key change in May came in a category called "revolving credit," principally credit-card debt, that shot up by $3.36 billion in May after declining by $876.7 million in April. That was the biggest increase in credit-card debt for any month since mid-2008, when the economy was in the midst of the 2007-2009 financial crisis.”

While the experts at the Fed didn’t shed much light on the reasons behind this big monthly shift in consumer debt, this uptick in more credit card use could reveal a return to pre-recessionary buying sentiments during which many people who had foregone luxury buys during our weakened economy are now feeling more confident about filling their carts with items that are less about “need,” and more about “want.”

Another possibility, according to Reuters, is that average consumers, facing fewer job prospects in recent months were forced to turn to credit cards and other consumer debts more often just to pay basic bills.

“For a lengthy period from late 2008 until recently, consumers had been paying down credit-card debt on a fairly regular basis,” wrote Glenn Somerville at Reuters. “Analysts said that trend, which effectively meant debt loads were easing, was healthy because it should put consumers in a better position in future to resume spending and thus add to economic growth. A category called "nonrevolving credit," which includes such items as student loans and car loans, expanded by $1.7 billion in May after shooting up by $6.54 billion in April.”

This is not a good sign for a healthy number of unemployed and underemployed Americans struggling to stay current with basic bills, much les high interest consumer expenses.

If the old methods of eliminating expenses or increasing income aren’t working to help you personally combat credit card damage, it may be time to consider a personal bankruptcy. So, if you find yourself in a situation where you can’t cover your credit card debt or other consumer loans after paying for the your secured bills, consider a Chapter 7 bankruptcy, which allows you to get rid of your unsecured debt, providing a safe period to save for higher priority expenses such as your home, car, retirement, savings and child support.

And if you’re wondering exactly how reduce your debt—credit, debit, loans or otherwise—and get back on track, knowing a qualified bankruptcy attorney can be your first best step tp help you to conquer your creditors and face your financial fears, yielding the right kinds of support, information and insights—at a low cost— for a viable and secure future beyond all of the ill-promised plastic “rewards.” The bankruptcy attorneys at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to +1-919-646-2654, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.

Debts Hurt! Got debt? Need help? Get started below!

Serving North Carolina

  • Charlotte
  • Fayetteville
  • Durham
  • Wilson
  • Greensboro
  • South Raleigh (Garner)
  • Southport (Phone Consults)
  • Wilmington (Phone Consults)

North Raleigh

6616 Six Forks Rd Suite 203 Raleigh, NC 27615 North Carolina

Tel: (919) 847-9750

North Raleigh

Charlotte

7400 Carmel Executive Park Dr Suite 105 Charlotte, NC 28226 North Carolina

Tel: (704) 318-2702

Charlotte

Fayetteville

2711 Breezewood Ave. Fayetteville, NC 28303 North Carolina

Tel: (910) 323-2972

Fayetteville

Durham

1738 Hillandale Road Suite D Durham, NC 27705 North Carolina

Tel: (919) 286-1695

Durham

Wilson

2215 Nash St. NW Wilson, NC 27896 North Carolina

Tel: (252) 234-9194

Wilson

Greensboro

600 Green Valley Road Suite 210 Greensboro, NC 27408 North Carolina

Tel: (336) 542-5993

Greensboro

South Raleigh (Garner)

143 Highway 70 Garner, NC 27529 North Carolina

Tel: (919) 747-4400

South Raleigh (Garner)

Southport (Phone Consults)

4320 Southport Supply Road SE Suite 300 Southport, NC 28461 North Carolina

Tel: (910) 218-8682

Southport (Phone Consults)

Wilmington (Phone Consults)

4320 Southport Supply Road SE Suite 300 Southport, NC 28461 North Carolina

Tel: (910) 447-2987

Wilmington (Phone Consults)