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Credit card debt recently rose, but spending habits didn't

A recent boost in consumer borrowing has some experts hoping for economic growth, but whether that growth is actually accelerating is not clear. However, one report claims that consumers in America recently borrowed more and took on additional credit card debt. Could it be an indication of an improved economy? For many Washington consumers, taking on additional debt can be an indication of a financial crisis.

The Federal Reserve reported that debt is currently growing at just over 8 percent annually. This trend gained a boost in Aug. 2016, when possible optimism regarding job growth might have encouraged consumers to take on even more debt. The current consumer debt total is at $3.7 trillion, which gained a boosted $25.9 billion in Aug. 2016 alone.

Credit cards were responsible for $5.6 billion of that debt, which was noted to be a 7 percent increase. Student and auto loans comprised the other $20.2 billion of the Aug. 2016 increase, and was up 9 percent from the same time last year. However, while spending rose, the unemployment rate also went up despite employers adding over 150,000 jobs during Sept. 2016. This could possibly account for the findings of a separate report, which determined that while consumers are borrowing more, they are generally not spending any differently.

Washington consumers who are struggling with unemployment, unexpected medical bills and debt that they are unable to handle often face necessary credit card debt just to meet daily needs. It can become increasingly difficult for these consumers to handle the burden of debt, especially when past-due payments are often followed by harassing creditors. Seeking financial security through personal bankruptcy proceedings can be an effective approach to handling this type of situation.

Source: foxnews.com, "US consumer borrowing rises in August", Oct. 7, 2016

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