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Credit card debt contributing to slow economic growth

Credit card debt has become a problem for many people in Alabama and across the U.S. With the downturn in the economy, many people are making purchases on credit. Credit card companies have begun to prey on consumers and with high interest rates and fees, it's easy for credit card debt to get out of control quickly and become more than the cardholder is able to pay back.

Many economists are expected to report that in the first quarter the economy grew at a moderate 2.5 to 3 percent annual rate. According to IHS Global Insight, the rate was closer to 2.1 percent. This low increase is attributed mainly to high debt. Consumers are making mortgage payments, paying off school loans and making credit card payments, leaving little to spend on purchases.

Student loan debt increased $117 billion last year to a record $1 trillion, according to the Consumer Financial Protection Bureau. In fact, a survey released by CouponCabin.com shows that more than 80 percent of 18-to-34-year-olds still have a balance on college loans, more than one third owing more than $20,000.

The downturn in the economy and weak job market contribute to the problem. Because many people are having such a difficult time finding employment, many are going back to school to gain more skills, adding to school debt. The inability young people are experiencing finding jobs has discouraged many from getting married, buying homes, and spending money on furniture and other purchases.

If you are one of the many Americans facing a mountain of credit card debt it would be wise to speak with a qualified attorney who can advise you on your best options and help you work toward a debt free future.

Source: USA Today, "Heavy debt holds down consumer spending," Paul Davidson, April 26, 2012

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