Consumer Debt Trends and Issues in 2006

Throughout 2005 we heard of the unbelievable growing in consumer debt. Credit Card companies raised credit card bounds of many consumers. Many folks used home equity loans to pay off credit card loan dust which was hurting their center social class perceived entitlements to have got it all in advance of paying for anything. Buy, buy, purchase and store till you drop was the battle cry, yet in retrospect who is crying now?

Once these consumers paid off their high-interest credit card debt with low-interest rate home equity loans they lowered their complete all debt loading and the interest they were paying on this debt; a once in a life-time chance to work their manner out of debt. But instead the credit card companies showed their credit cards paid off on their credit reports and then upped their credit limits, sent them new cards with higher balances. And like any good debt ridden “give it to me now” American consumer these folks proceeded to charge it all dorsum purchasing alls kinds of consumer goods, that they neither needed or had topographic points to store.

In 2006 we will not see such as a rocket ship addition in home equity and in some markets we have got seen a tableland in the lodging market and a pulling back in many other markets. In fact home foreclosures up. In Las Vegas one of the top two fastest growth lodging markets for all of 2002-2005 we are seeing some 80-90 foreclosures per day. Private debt loading in the United States have reached 1.2 Trillion.

We saw deficiency lustre 2005 Christmastide Sales and slowing of the consumer spending, at least at the rates we saw previously. Of course of study some of those dollars are still being spent, yet on necessities such as as gasoline and warming fuel. The over all tendency in the economic system will not be a negative 1 but you can anticipate combustible terms to edge dorsum up and this credit card issue go the back ledgeman of many a center social class household in America. Think more than on this in 2006.