Credit card debt: the perfect storm. . . .

While it appears that consumers added less consumer credit debt than analysts predicted in February (a measly $5.1 billion as compared to the estimated $10.3 billion), experts believe that the slowing economy and rising prices are leading more Americans to use their credit cards.
According to this CNN article, total revolving credit debt rose 2.4% to an astounding $2.54 trillion dollars in February! Meanwhile, non-revolving debt (such as auto loans) rose by 0.4% to $1.588 trillion. It's hard to believe that Americans are still out there financing cars at all!

The article points out that the total consumer debt discussed doesn't even account for mortgage and home equity loan debt! Considering many people appear to have been financing their lifestyles using home equity credit, the fact that these loans are getting more and more difficult to come by means that more Americans are turning to their credit cards to bridge the gap.

One analyst calls this the 'perfect storm' as credit card companies are now raising interest rates, especially for people who are close to their credit limits, submit late payments or no payment at all! These are the same people who may be struggling to pay their mortgages, cover the grocery bill, or keep the utilities on.

If you're on the fence about whether or not to use your credit cards, take a moment to watch Maxed Out, a documentary about the credit card industry. It may open your eyes to some of the more devious practices credit card issuers use to get your business and to keep you in the earn and spend cycle.

Maxed Out: Part 1
Maxed Out: Part 2
Maxed Out: Part 3
Maxed Out: Part 4
Maxed Out: Part 5
Maxed Out: Part 6
Maxed Out: Part 7
Maxed Out: Part 8
Maxed Out: Part 9

If you don't want to watch this on your computer, consider checking it out at your public library. It's definitely worth an hour of your time.