Credit Cards, Payday Loans, Growing Balances, Oh My! Nationwide Debt Rises
By J.J. CameronPayday Loan Writer
Young women may be falling into debt and considering payday loans these days, but they aren't the only ones.
Consumer borrowing unexpectedly shot up in June as Americans used credit cards to finance more of their purchases, a Federal Reserve report stated Monday.
Non-mortgage loans to individuals rose $10.3 billion to $2.19 trillion, following a revised $5.89-billion increase in May. This would include approvals on resources such as faxless payday loans. The two-month gain was the biggest since September-October 2004.
Americans are relying more on credit card debt because rising interest rates and a cooling housing market make it harder for them to take out home equity loans. Higher gas prices are also prompting consumers to borrow more, economists said.
People almost need a payday loan online in order to fill up. Seriously.
"The jump in consumer credit coming at a time when consumers are hard hit by soaring gasoline costs could indicate some financial woes on the part of borrowers," said Chris Rupkey, an economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. "It looks as if consumers are relying more on credit cards now that other avenues of credit such as mortgage refinancing have been shut off to them."
Revolving debt, such as credit cards and cash loans, increased by $6.65 billion in June, after rising $7.42 billion in May. Non-revolving debt, such as loans to buy cars and mobile homes, rose by $3.62 billion in June after declining $1.54 billion a month earlier.
Overall, U.S. consumer debt rose at an annual rate of 5.7% in June.
