Ten years on from the mortgage meltdown and it seems Americans are back to their old habits. "When you have a period of time with unemployment at history lows people should have the means to be able to pay down debt, not go into debt." says Chuck Simmons, a financial advisor with Ameriprise. "Having debt is an overextension, buying things they can't afford with cash. IF we go into a recession or a global slowdown there will be a long term consequence."
According to The Center Square, we topped out at trillion dollars of consumer credit card debt in January. Since then, we've paid down over $38-billion but by the end of the year we're expected to add another $70-billion. Simmons says, "The high level of debt that we're seeing now can become a problem in the future and can impact people's ability to save for retirement and other goals such as [their children's] education."
"We recommend that clients try to pay off their credit cards as quickly as possible and only recommend they only carry mortgages and car notes when necessary," Simmons says. "If Interest rates down the road either increase or if peoples jobs or income become less secure," Simmons cautions. "Then making those payments could present a significant problem, impacting people through credit scores, bankruptcy or ability to save."
