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U.S. credit card debt is on the rise

It appears as though an improving economy is leading to increased spending in Tennessee and across the country. In fact, if consumer spending continues at its current pace, credit card debt in the U.S. will hit the $1 trillion mark by the end of the year according to MarketWatch.

How much people are using their credit cards is a good indicator that consumer confidence is high. This means that people feel upbeat about the level of income they are earning and they feel secure enough in their jobs to take on debt and spend that money freely. Increased spending is good for consumers as long as they are able pay off their balances each month. This appears to be the case, as credit card balances are carried over from month to month by only 35 percent of families. The average balance per family was $7,597 according to data for the first three months of 2016.

However, this increase in spending is worrisome to certain people. As more people take out credit cards and receive credit limits that are higher than what they previously had, the potential to spend beyond their means looms large.

In addition, credit card companies and banks have now been issuing credit to those who in the past would have not qualified reports Business Finance News. Such people are often termed subprime borrowers. Subprime lending was one of the major factors that led to the housing bubble prior to the Great Recession and some people fear that a credit card bubble may form if both lending and spending continue at their current rate.

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