Right before the financial crisis hit, there were reports that Americans were spending about a cent more than they were saving. This was due to many factors, but I definitely think the “pay it later” attitude that our government (and every other government in the first world) has adopted is to blame in some part.
Regardless, whereas we were saving more than we spent…now we’re relying on credit cards again to house debt…and that’s bad for a very important reason.
More American households are falling back into the debt hole, this time without the safety net of home values to help bail them out, the New York Post reported Sunday.
Last year, total US consumer debt reached its highest point in a decade, according to a credit card industry observer.
“Now more than ever, families need to work at saving and paying off any outstanding debts,” said Howard Dvorkin, a certified public accountant and founder of the credit counseling service Consolidated Credit.
After a few months of reducing credit card debt levels, Dvorkin said, Americans are starting to return to their reliance on debt.
Definitely not an encouraging sign.
More as it develops…