American Consumers Dive 5.6 Billion Dollars Deeper in Credit Card Debt in One Month

While some of us were saying No to Restaurants in November it seems others were saying YES to binge shopping sprees financed by credit card debt.

In an article sent to me by my friends over at Impulse Save, consumers racked up 5.6 billion dollars in credit card debt in November alone. Judging by the shape of the economy (specifically unemployment) one would expect these numbers to be down so this is an astonishing statistic. The Time Moneyland article also shared Federal Reserve data that shows consumer borrowing skyrocketed by 20.4 billion and is the highest month-over-month increase in the past 10 years

As if the 5.6 billion dollar increase wasn’t scary enough you should see the total debt load Americans now carry — excluding mortgages.ย It’s now a whopping 2.5 TRILLION DOLLARS!! Americans should really be ashamed of these numbers because there’s no excuse for it!

Am I off my rocker here or is this data disturbing you just as much?

For a while I was excited about what appeared to be a drop in overall debt. It seemed people were borrowing less and paying off more so why the sudden surge? Has Christmas spending become so important that we flush our futures down the toilet to fund it?

Retailers brought you the Black Friday circus and credit card companies provided the guillotine but the American consumer acted as the executioner-in-chief!

This is what I see happening in this country right now.

Americans are irresponsibly taking on more debt and spending more than they make while the Occupy Wall Street crowd protested economic inequality claiming to be the 99% who do not have the same opportunity to build wealth as “greedy rich” people in this country. They expect the ones whom have worked hard and created the quality of life they have by making responsible financial decisions to make up for their own irresponsible choices.

The opportunity is there. It never left.

The American Dream has never abandoned America; if anything it’s become easier to live the life you want. The only thing standing in our way is debt — 2.5 trillion dollars of it! If you look real closely at the Statue of Liberty you’ll notice she’s carrying a torch not a credit card.

America is not where it is because the 1% don’t pay enough taxes or because the opportunity does not exist. America is where it is because the 99% continue to outsource personal responsibility by increasing their debt! This is just my observation and you may disagree, so let’s have a mature conversation in the comment section shall we?

Thank God for those of you who have already rejected this American disaster and have started taking responsibility for your own financial lives. To those of you who have stopped borrowing money and have taken an active approach in paying off debt:

You should be applauded!

You should be congratulated!

You should be looked up to and admired!

Because YOU get it!

You understand that the life you lead is the life you receive and the only person that can rob you of that is you!

It’s days like this that make me truly question whether or not I’m doing enough to spread the debt free message. Perhaps I can do more.

My Message to You

If there is an underlying message to be taken away from this post, it’s that if you are one of the ones who piled up more debt over the holidays it’s not too late to turn things around. Your debt is controlling your ability to take advantage of the American Dream — whatever that dream means to you. So do something about it!

This is not me judging you. I used to be a part of these statistics and it wasn’t until I decided to never borrow again that my life started heading in a more meaningful and exciting direction. I’m not special nor have I had anything handed to me to make these changes possible. My wife and I simply stopped borrowing money.

You can do this too but only you can make it happen! No one can do it for you.

You can start by checking out my free email course on Getting out of Debt. (see banner below) Let’s reverse these statistics. Good luck! ๐Ÿ™‚

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About Brad Chaffee

6 Responses to “American Consumers Dive 5.6 Billion Dollars Deeper in Credit Card Debt in One Month”

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  1. Eric says:

    Brad, great thoughts! I can feel the passion. The upside to that increase in debt is that our economy will now grow since we took out more debt. We are dependent on debt to maintain and to grow as a nation. Think about it…if we didn’t splurge (go into debt) on Christmas you know how many companies would go under and people not hired the next Christmas season? We need that debt to keep us afloat.
    But you are right, on the one hand debt is keeping us afloat, and on the other it is keeping many from the “American Dream”. I guess that is why it is called a dream, because we can make believe it exists, but it is not real for most people.
    You are right, Lady Liberty is not holding a credit card, but that’s also because back then loans were frowned on. Today, if banks aren’t lending or if we aren’t splurging, liberty doesn’t shine too brightly.

    So, I think debt reduction is great, but we must realize on a massive scale it turns into a lot of pain for a lot of people. Like any addiction, getting it out of one’s system is always painful, for awhile. Then it gets better, much better.
    Great post. Thanks for keeping us informed!

    • Brad Chaffee says:

      Yeah I’ve heard that argument before Eric and I definitely see your point but I do disagree. I admit that if EVERYONE stopped borrowing money tomorrow it would cause the economy to collapse, but realistically we both know that will never happen. If it was a gradual change over time ultimately people would eventually have more of their money to stimulate the economy by paying for the goods and services that make their life better. I was much more broke when I was in debt and had much less opportunity to stimulate anything unless I was out running up more debt. Like you said, at first it would be painful for businesses but it would get much much better as the transfer of wealth changed from banks and credit companies to the pockets of the people. At first, not borrowing money was hard for us until we got an emergency fund.

      An economy that relies on debt for strength is really not that strong at all. It’s nothing more than a bubble much like the housing market was before the collapse. LOL Plus you have to admit that the problem with debt isn’t that people use it responsibly, it’s that people are using it extremely irresponsibly and November is proof of that. Still I believe no debt is the best debt and will always fight for a debt free utopia. haha! ๐Ÿ˜€

      Thanks for the great comment Eric. I love having great conversations like this. Have a great weekend man!

  2. Jeffrey says:

    I’m curious what the historic number is, and if the $5.6 billion is higher or lower than that. But either way, that IS a lot of debt!

    I’m a big fan of Planet Money, and they did talk about how having zero debt would not be a good thing economically (although they were talking about national debt, not personal debt, so maybe it doesn’t apply the same way). But there’s still no reason for this much debt to exist, especially in the form of high interest, credit card debt.

    • Brad Chaffee says:

      Yeah it probably wouldn’t be good at first if everyone got out of debt at the same time but I think that it is very dangerous for us to believe that we shouldn’t have a debt free mindset simply because (at first) the economy would suffer. The economy is suffering right now and I have to look at the fact that my wife and I are able to do much more now than when we were in debt. Debt can only take someone so far.

      For instance, I can promise you that my wife and I spent (stimulated the economy) more than we usually do on Christmas due to some high dollar technological purchases and we didn’t need credit to do it. So with that said, the economy can be stimulated by people with no debt. What are we saying about America when we say debt is needed for a strong economy. There is always pain involved when a big change is needed but should we really be saying we shouldn’t make those changes because at first it would be too painful? ๐Ÿ™‚

      I do concede that their is a big difference between personal and business debt though I personally choose to run my business debt free. The only real difference is that some businesses rely on high dollar investment to expand and grow to remain competitive but that doesn’t mean it couldn’t be done debt free it just means it would be harder…at first. It’s like buying a house. Because of the amount that it typically takes to buy a house, people choose to go into debt as opposed to renting until they’ve saved up the money costing them tens of thousands of their hard-earned dollars in interest.

      Harley Davidson is a pretty big company. It’s debt free. Dave Ramsey also used this method to grow and expand his empire as did many other great companies. He didn’t always own the building he uses now, he rented the space until he had enough money to purchase it without debt.

      I just refuse to buy into the notion that debt is a tool (which is what we’re saying here) and must be used. Debt has not always been available especially to the degree it is now. There is no excuse or reason personal household debt should be as high as it is in this country.

      Thanks for commenting Jeffrey! ๐Ÿ™‚

  3. Penny says:

    Absolutely love this post. Love that you are willing to take a stand and make some statements that may not be taken well by some. I will totally agree that it would hurt the economy if everybody stopped using credit cards all together today, but reality says that will not happen. If as a society we could get back to a point were loans were frowned upon gradually over the next 15 to 20 years, think of what America’s future would look like! If each person were to just take care of their household, it could happen.

    When our country was settled, people didn’t come here looking for somebody to take care of them, they came here looking for a place where they were allowed to take care of themselves. Now the banks totally push the line that the only way to get ahead is to have debt and the bank will take care of you. And for the purposes of getting reelected government officials tell you they will take care of you and pass laws to “take care of you.” If each person took care of themselves first – and then if they saw fit carefully looked for ways to help others – we would all survive a lot better.

    • Brad Chaffee says:

      Great comment Penny! I think your rebuttal to “the need for debt” for a strong economy was better than mine. Well said! I definitely think a plan of 15-20 years to change direction is reasonable. As it stands now though it seems that will never happen because the more popular position is that the economy would suffer and debt is needed. It causes people to never take the appropriate steps to make it happen. As I always say, if someone thinks something isn’t possible they’ll never attempt to make it possible. As long as we as a society continue to push the debt mindset for survival America’s future looks pretty grim. Personal debt or as a country all one needs to do is look around to see what debt does to household’s and nations.

      It personally destroys them! On different levels of course but the end result is usually the same. The stages of getting out of debt are much like the stages of grief.

      Shock and Denial (where we are as a country)
      Pain and Guilt
      Anger and Blame (“it’s not my fault I’m in debt!”)
      Depression, Despair, and Reflection (where it get’s worse or better)
      Upward Turn
      Acceptance and Hope

      Actually to complete this cycle there’s usually an 8th stage – Complacency (rinse and repeat hence the cycle of debt) As you can see, we have a long way to go!

      I think I have a new idea for a post. LOL BTW, I love the part of your comment:

      “If each person took care of themselves first โ€“ and then if they saw fit carefully looked for ways to help others โ€“ we would all survive a lot better.”

      That is my view exactly!!! Thanks for the terrific comment! ๐Ÿ˜€

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