Credit Card Debt Up 7.6% - Almost $3,000 per Person

On May 7, 2007, the Federal Reserve released the G-19 Consumer Credit report for March, 2007. It stated that revolving credit (like credit card debt) was 7.6% higher than March 2006. The total was $872 billion, or $2,943 of credit card debt for every man, woman, and child in the United States.

This is besides the $1.5 trillion in non-revolving credit, like auto loans. That equates to an additional $5,093 debt per person, and represents a 4% increase over March 2006 debt.

Higher mortgage rates have caused many families to switch from home equity loans to credit cards to finance purchases. In addition, the Bankruptcy Abuse Prevention Act of October 2005 has prevented many indebted families from filing for bankruptcy, further inflating the credit debt figures.

Personal consumption drives 70% of the U.S. economy. If this were to falter, so would the bulk of our entire economy. A combination of softer retail sales, higher debt levels and lower home equity levels is a shaky foundation for continued economic growth.

What It Means to You

A softening economy coupled with rising credit card debt is a good time to reduce your financial vulnerability. Consult with your financial planner and develop ways to reduce your own credit card debt....and avoid becoming a statistic in the Federal Reserve’s G-19 report next month.

Related Articles

• Chicago Federal Reserve web site How to Budget
• Making a Plan to Reduce Credit Card Debt
• More Resources for Reducing Credit Card Debt