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Credit Card Debt Creeping Up Again

It seems we’ve begun to pile up more debt on our credit cards again — a trend we definitely need to nip in the bud.

The Federal Reserve says revolving debt, which is overwhelmingly made up of credit card debt, peaked at $1.02 trillion in July 2008.

That was just before the financial crisis hit and the economy spiraled into the worst recession in 80 years.

For nearly three years, the amount of revolving debt fell pretty quickly, bottoming out at $834 billion in April 2011.

Since then, we’ve been on a slow creep back up.

The latest Fed report says revolving debt reached $856.5 billion in May, the highest it’s been since September 2010.

When credit card debt was going down, there were lots of self-congratulatory stories about consumers working hard to shed the ball-and-chain of high-cost credit card debt.

But I always wondered how much of that decline was really due to debts being discharged through bankruptcy or from banks writing off uncollectible balances.

The fact that the steep decline we saw during the recession ended so abruptly makes me suspect that the courts and banks had more to do with the drop than wiser consumers.

I’m certainly not buying any argument that this is a sign of economic recovery. No, this is a sign that we haven’t learned our lesson when it comes to spending money we don’t have.

Sure, we can blame the big bad banks for sending us more credit card applications — direct-mail pitches are up 18.5% in the first quarter of 2013 compared with the same time last year.

But when you get right down to it, this is on us.

Credit card debt is the single biggest wealth killer in this country.

So it’s time for all of us to take a look at our credit card statements. Are you carrying a balance? Is it creeping higher this year?

The only way to keep high-cost debt from killing your wealth is to put your cards away and pay it off.

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