Each of these factors have arguably been compounded by the fact that wages in this country have remained stagnant for years. According to a Census report last year, median household income in the U.S. did not increase at all between 1998 and 2008. Yet consumer spending continued to increase, and with it, so did the amount consumers borrowed.
Unfortunately the problem of personal debt may only get worse in the near future.
The economic downturn has caused wages to be mostly stagnant through last year and much of 2010. Meanwhile, after an initial period of restraint, consumers are beginning to spending more freely now as the economy begins to improve. As a result, a recent report showed that credit card debt is still rising and because many consumers have been unable to pay off the debts they have already accrued, their lenders have been forced to resort to charge-offs instead, which can ruin consumer credit scores in the future.
—For a comprehensive credit report, visit the BankingMyWay.com Credit Center.