Reuters
Americans Struggle with Credit Card Bills
Friday March 5, 12:22 pm ET
NEW YORK (Reuters) - Americans, facing a weak labor market, are struggling to pay off their credit card bills, according to an industry survey released on Friday. At the same time, they have no plans to rein in their spending, which accounts for two-thirds of the U.S. economy, the Cambridge Consumer Credit Index survey said.
My comment: How can they rein in spending, there's food and energy bills to pay, AND maintaining life styles.
Thirty-nine percent of the 1,000-plus people surveyed last week said they paid off their monthly balance in full, down from 43 percent a year ago, according to the survey.
Although in a hiring mode, companies have been adding jobs at a tepid pace. On Friday, the government reported that nonfarm payrolls increased by 21,000 jobs in February, far below the 125,000 gain forecast by economists polled by Reuters.
Consumers who are confident about their financial standing have either limited their credit card use or paid their bills in full every month. But those who are struggling to make monthly payments have been forced to take on more debt.
"The haves either don't use their credit cards at all or feel secure about paying off their credit card bills when they arrive," Jordan Goodman, a spokesman for the Cambridge group, said in a statement. "The growing number of have-nots, however, are being forced to borrow to pay for their daily necessities, and are getting deeper into debt."
The Cambridge Credit Counseling Corp., based in Islandia, New York, is a credit counseling group affiliated with Debt Relief Clearinghouse. It launched the index in 2001.
In the latest survey, 49 percent of those who are taking on more debt said they are borrowing more because they do not have the money to pay in full when the credit card bills arrive. That figure is up from 44 percent for the same period in 2003.
The survey's "reality gap" index, which gauges the difference between the amount of debt consumers say they will pay off in the next 12 months versus the amount they actually paid off a month later, grew to 12 percentage points in March from February's 7 points.
Consumers, while juggling to pay off their credit cards, have not shown much willingness to become more frugal.
In March, 40 percent of Americans surveyed plan to take on more debt to make purchases, up from February's 37 percent, the survey said. |
