U.S. consumers max out their credit cards in month when personal savings tumble

February 2014 ECONOMYOne week ago we remarked that in the month of December, in order to fund their purchases of Holiday gifts and year-end trinkets, Americans burned through a whopping $46 billion in personal savings, in the process taking the US saving rate down to a one year low of 3.9% and dropping. Today, we got the credit side of the ledger with the December consumer credit report, in which we learned that in addition to the now traditional draw of Car and Student loans, which came out to $13.8 billion, or exactly in line with the 12 month average draw, sending the total notional to a record $2.24 trillion, it was revolving credit, i.e., credit cards, which saw a substantial $5 billion increase in outstandings – the most since May 2013 – bringing total revolving credit to $862 billion if still far below the nearly $1.1 trillion in student loans outstanding. So just as the US consumer was tapped out, and saw their personal income remain unchanged from November and real disposable income cratered, as a result having to draw down on their savings, the remainder of all purchases was funded through the use of credit cards, which may or may not be repaid in 2014. There is always hope that this time will be different and incomes finally pick up. –Zero Hedge
Prosperity is just around the corner: The wheels of the economy are creaking under the strain of a system that is too over-bloated on credit and too short on low-cost high-quality merchandise goods that could be manufactured domestically to employ the masses. Instead; once again, consumers are prodded into raiding their savings and running up high credit cards bills to keep an economy running that has long exhausted its natural energy, creativity, means, and vitality to be relevant and self-sustaining in the 21st century.

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This entry was posted in Banking Crisis, Bankruptcy, Boom and Bust Cycles, Civil Unrest, Depression and Anxiety, Economic Collapse, Economic Hardship or Loss, Fiat Money Printing Fiasco, Financial market turmoil, Greed and Corruption, Hierarchal Control, Squandered Resources, Struggle for Survival, The Pyramid Model, Unemployment rising, Unsustainable Debt Burden, Widening gap between rich and poor. Bookmark the permalink.

5 Responses to U.S. consumers max out their credit cards in month when personal savings tumble

  1. Irene C says:

    I loved the song. Quite relevant for today.

  2. niebo says:

    Haha, ha, ha, lol, lol, rofl, rofl, lmbo, lmbo, haha, haha, ha, hack, choke, sputter, cough, wheeze: great song, funny, but NOT funny, considering this “just in” breakdown of the “shrinking unemployment”/”jobs recovery” (that so many in DC have been telling the rest of us about); the announced numbers are a sham: actual jobs growth, over the last five years, is 0.1 percent:

    http://www.zerohedge.com/news/2014-02-08/what-happened-last-time-unemployment-rate-dropped-much

  3. Dennis E. says:

    I use it too but credit cards can be like chocolate covered donuts==additive…..
    Have to be careful…….

  4. Lana says:

    Can such figures ever be taken at face value? Is the big decrease in outstandings due to balances being “written off” on accounts that were in default? How much of the Holidays’ and-still-continuing increase in outstandings do you suppose is happening because of all of the illicit charges going on so many accounts after hackers obtained their account info at Target, Neiman Marcus, etc.?

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