From the desk of Lead San Francisco Attorney Alison Cordova:
Many economic analysts and commentators have been claiming that the economic recovery will stall without more consumer spending. It seems consumers were listening. According to CBS, “[c]onsumers went on a spending spree in the second quarter of this year, racking up $28.2 billion in credit card debt. . . . This run up in debt was the largest in six years.”
But the fear here is that this surge in consumer spending is not happening with cash or debit cards, but with credit, i.e. funds that most consumers don’t actually possess and are borrowing at rates typically over 10%.
A study by CardHub predicts credit card debt will hit $54.8 billion this year. That is a 41% increase over last year.
Spending with credit cards will not save the economy if it puts such a burden on the American family that they cannot make minimum monthly payments or save for retirement. If you are struggling to make minimum monthly payments or you are seeing way too much of your monthly income go toward interest, contact an attorney that can help you restructure your debt, get rid of high interest credit cards, and get to a point where you are spending and saving real money, not credit.