February 27, 2012

Another sign the 'recovery' isn't solid

What's in your wallet?
Well into an article about credit card debt rising again to dangerous levels, MyFoxDC reports (emphasis added);
In a weak economy with high unemployment, Dvorkin noted, many people with big card balances become vulnerable to financial catastrophe.

Lewis J. Altfest, a Manhattan adviser who targets professional, high-income clients, devotes part of his practice to telling the well-heeled how to cut back on credit card debt. "It's still a big problem. Some people want to live life to the fullest even though they are using their cards too much," Altfest explained. He said many clients last year tried to reduce card debt. But some "are falling back into their old ways."

Indeed, last holiday season many consumers financed Black Friday trips to the mall and Cyber Monday online buying sprees by making purchases with plastic, Dvorkin contends.

"As the bills begin to roll in, consumers may find themselves unable to pay them off. It's good to see an increase in consumer spending, but never is it worth going into debt," according to Dvorkin.
 In other words the situation hasn't changed much for consumers and the credit purchases may have put a lot of people back up towards their credit limits or credit comfort levels once again.  That means that if credit card purchases are fueling the tepid-at-best recovery then that recovery may have already run it's course or may be nearing that point soon.

It's one more thing for the president to choke on.
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