US Consumer Debt Surges To Record Highs
America has a shocking new “savings and loan” crisis. Consumer debt is surging to record highs, fueled by rising mortgage debt, student loans and a binge on credit card use. And more Americans are flat-out broke, with no emergency savings. “Consumer debt is an ongoing personal financial crisis for many Americans,” said John Madison, CPA and personal financial counselor at Dayspring Financial Ministry. “The ease of obtaining ever-increasing levels of available credit traps many consumers into the illusion that they can buy whatever they want — regardless of their ability to repay the debt they take on.” Despite borrowing beyond their means, many Americans are in a more upbeat economic mood lately. That positivity is propelling borrowing and spending to new highs, driven by the long-running US economic expansion, a soaring Dow Jones industrial average, low unemployment and rising average hourly pay. But some analysts worry about the implications for today’s wild spending spree when the next recession inevitably hits. “The lack of financial wiggle room will cause further stress for indebted households leading up to, and during, the next recession,” said Greg McBride, chief financial analyst at Bankrate.com. “When the economy slows, income drops, and layoffs rise, those living paycheck-to-paycheck will feel the squeeze soonest, and will show the quickest surge in delinquencies.” [as reported in 7/15/19 Credit & Collection e-newsletter]