By Tyler Durden
As we’ve pointed out time and time again, rising consumer-debt levels are one of the most overlooked risks to the US economy, especially as household debt levels (excluding mortgages) climb to record highs and credit-card charge-offs at smaller banks have surged in recent months.
Earlier this month, we celebrated the fact that WSJ had finally caught up to the topic, admitting that the combination of stagnant wages, rising interest rates and rising consumer debt could have potentially explosive consequences for the US economy.
And now, Bloomberg has also jumped on the band wagon, warning that rising credit card debt could cause problems in the not-too-distant future once baseline interest rates have had time to rise.
US consumers have accumulated an aggregate $1.04 trillion credit card debt.
Or, as Bloomberg put it, “a healthy economy can be a dangerous thing.”
“When consumers are confident, or over-confident, is when they get into credit-card trouble,” said Todd Christensen, education manager at Debt Reduction Services Inc. in Boise, Idaho. The nonprofit credit counseling service has seen a noticeable uptick in people looking for help with their debt, he said.
Spending on US credit cards climbed 9.4% last year to $3.5 trillion, …read more