proportional to the consumer debt out there.
When consumer debt goes up, so do bankruptcy filings.
Last year, credit card debt in the U.S. surged by approximately $71 billion to $917.7 billion, according to a new study from CardHub.com. The research also found that most of the debt accrued in 2015 came in the fourth quarter, when Americans tacked on more than $52 billion.
“With 7 of the past 10 quarters reflecting year-over-year regression in consumer performance, evidence is mounting to support the notion that credit card users are reverting to pre-downturn bad habits,” CardHub CEO Odysseas Papadimitriou said in a statement.
Fourth-quarter credit card debt also grew at its largest pace since the Great Recession, CardHub also said.
Now, if we borrow more money, but are making more money, we would be better able to repay the increased debt.
However, as the linked to article goes on to state:
Nonetheless, wage growth remains stagnant. U.S. workers earned 3 cents less an hour last month.
“The drop in February [wages] was pretty sharp,” Santschi said. “The wage situation does not get as much attention as the headline number and the unemployment rate, but it’s evidence that the economy is basically flatlining.”
Which folks are increasing their debt load? Josh Zumbrun on the NASDAQ website:
Americans in their 50s, 60s and 70s are carrying unprecedented amounts of debt, a shift that reflects both the aging of the baby boomer generation and their greater likelihood of retaining mortgage, auto and student debt at much later ages than previous generations.
The average 65-year-old borrower has 47% more mortgage debt and 29% more auto debt than 65-year-olds had in 2003, according to data from the Federal Reserve Bank of New York released Friday.
By contrast, the overall debt balances of most young borrowers haven’t grown or have declined. The average 30-year- old borrower has nearly three times as much student debt as in 2003. But these borrowers have so much less home, credit card and auto debt that their overall debt balances are lower.
This shift for young borrowers could have “consequences in terms of both foregone economic growth and young consumers’ welfare,” said Ms. Brown.