Consumer Credit Card Debt Rises; Could Mean Big ARM News Come Spring

There are a variety of ways to check in on the status of our Long National Nightmare — i.e., the recession. In the news recently was this barometer: Consumer credit card debt rises.

Usually during a recession, credit card debt slows down to the point of almost reversing. However, through December, as a new federal report shows, revolving credit, made up primarily of credit card debt, increased at an annual rate of 4.1 percent in December, rising nearly $3 billion to $801 billion. December marked the fourth straight monthly increase in revolving credit spending.

Some of that, of course, is due to a $5.5 billion bump in December, thanks to the holidays.

While on one hand, an uptick in consumer debt speaks better of the economy, on the other…: “These credit card debt numbers are a concern but it’s too early to tell whether we are all falling back into the trap of spending more than we can afford,” Bill Hardekopf, president of Birmingham-based Lowcards.com, told the Birmingham News. “People certainly charged more this Christmas than last year.”

For the ARM industry, spring may be the time to start paying more attention to this data. That’ll be about the time we start seeing defaults and delinquencies based on this rising credit card debt level, coupled with static salaries.