Statistics released this month by the Federal Reserve shows that the decline in American credit card debt is slowly grinding to a halt as consumer confidence returns. Total credit Card debt in the US peaked at $957.5 billion in 2008 and when the recession hit people started to make real efforts to get out of debt. Over the course of three years, Americans reduced the overall debt by more than $167 billion to $790.1 billion in April of 2011. On average debt has fallen by about $6.2 billion a month but the average reduction for March/April 2011 combined was only $0.6 billion.
While many hoped that the Great Financial Crisis would have a lasting effect on how American consumers handle their finances some industry experts now predict that America's collective debt will start to slowly grow over the next 12 months as those who made a real effort to rebuild their credit take advantage of their higher credit scores. Stores and credit card companies alike are rejoicing at the return of consumer confidence. More consumer spending means more profits and if consumers did not learn their lesson about how to handle credit during the recession they could soon find themselves piled in debt once again.
As always, stay tuned to Credit Cards Professor for more credit card news and updates.
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