Posted on 08/05/2011 12:50:50 PM PDT by Free Vulcan
Highlights:
Consumer credit grew to $15.5 billion, to an annual rate of $2.45 trillion in June.
Biggest jump in consumer credit since August 2007.
Revolving credit (e.g. credit cards) grew 7.9%, or $5.21 billion.
Nonrevolving credit (e.g. auto & student loans) grew 7.6%, or $10.32 billion.
(Excerpt) Read more at marketwatch.com ...
This is one of those little obscure reports that I watch very closely. Big jumps in debt aren't good, but in this case I'm concerned as to the reason.
My guess the surge is people who are unemployed or underemployed just trying to survive. I don't see this as a people splurging or grabbing big ticket items or the like. Another really bad sign for the economy.
Big ticket items aren't showing a surge in movement via purchase.
Expanding credit to maintain lifestyle is not good. Many people fail to prepare. The state of denial we’re still in about our economic condition is baffling since there is a wealth of information.
I know a few people living off credit cards...and ALOT of people who live off of student loans.
Many of these people still have cell phones, cable tv, etc...completely unwilling to make a lifestyle change.
The student loan crowd especially believes they will never have to pay them back.
americans borrowed more money in June than during any month in nearly four years, relying on their credit cards and loans during a difficult economic stretch.
Borrowing and using credit cards at a time like this is not good news, except for the credit card companies and fatcats.
Remember those who defaulted on their credit cards are part of the reason we’re in this mess...
Now we are expected to believe that while more people lost jobs, homes etc, they are getting wealthier?
BS.
It’s the media blitz to get ‘confidence’ back...
You ain’t seen bad, but it’s coming.
I disagree, actually. Credit card companies have been extremely aggressive across the board in a) signing up college students leaving campus for the summer, and b) signing up new high school graduates for cards and loans.
My daughter has received a 'check' for $12,000 - all she had to do to become that deep in debt is deposit it in her bank account. There's supposedly tens of thousands of these checks out there. It came in an envelope that offered her 'Congratulations on graduating high school', and 'this will help get you on the road to your college career.' Details were 8% interest for the first 9 months, 23% thereafter.
Close-by in Beverly Hills, I know this guy who who rents out expensive cars. Weeks ago, he told me story after story about rich, young guys who had their credit cards maxed out, it became already embarrassing to them..for him to decline. One guy even tried to sell his Porsche 911 outside to RENT a Lexus.
It was truly insane. It was normal for him to swipe and run 4 credit cards on one person because the first 3 were declined.
That’s normal. My cousin who also graduated from high school this summer had Chase Card services on their grad fair. If they sign up, they get a free $50 gift cert at Best Buy. They try their best to hook kids into signing because their credit is clean.
I and the other parents saw a drastic difference between incentives to sign up for a credit card and a delivered check that induces a 12,000 loan. One you can learn responsibility from, the other is simply crushing debt.
My card is paid off and I still receive at least 4 offers a week from card companies to sign up for a new one with astronomical credit limits.
I can’t believe the relentless effort that is constantly being made to create more debt.... now especially.
It may be a sign that the unemployed have given up on finding a job and are starting to finance their own businesses. I’m seeing more and more of that among my clients.
If the kids a responsible, it can help their credit rating the sooner they get a card. One of the scores is related to how long you have credit. So, using one for small regular purchases is not a bad thing.
Agreed. A $12,000 unsolicited 'check' loan with well wishes for college is a far different thing.
Credit card companies have been hooking college students at lease since 1990.
I get a card offer about once a week. People who are spending more than they’re bringing in are going to jump on these offers. Food costs have gone up so much they’re hoping against hope their situation will turn around.
If you're living on a shoestring and gas doubles and food goes up 30%, you don't have a choice but to borrow just to stay even.
It’s almost as if these people expect really bad times soon and are splurging on a few more things before it’s all taken away.
Follow these steps and you’ll become wealthy and never need a credit score.
http://www.daveramsey.com/new/baby-steps/
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