Americans Can't Keep Their Credit Cards in Their Pockets

While credit card debt may be good for U.S. GDP, it isn't good for consumers.

Jun 15, 2014 at 1:07PM

The economy is doing better, but not as great as the numbers initially make it seem. That's the clear common theme between the Department of Labor's May jobs report and the newest figures regarding consumer credit card debt -- an indicator of consumer spending habits and household financial health.

While the labor report revealed an addition of 217,000 jobs to the U.S. economy in May, ostensibly bringing employment back above pre-recession record levels, an estimated 7 million more positions are needed to account for population growth and complete the turnaround. And while U.S. consumers paid down roughly $32.5 billion in outstanding credit card debt during the first quarter of 2014, that represents a 1% decline relative to Q1 2013 and the continued deterioration of credit card habits as Great Recession lessons fade with time.

Consumers historically pay off a lot of credit card debt during the first quarter of the year -- with tax refunds, annual salary bonuses, and New Year's resolutions fueling their efforts. But last year's first-quarter pay-down was 4% smaller than in 2012, and we ended 2013 having incurred 6% more debt overall. This year's first-quarter pay-down was even smaller still. As a result, CardHub projects that we will end 2014 with a $41.9 billion net increase in credit card debt -- 8% more than we racked up last year and a 14% increase relative to 2012.

So just as the employment sector still has far to go, consumers must strive to remember the corrosive impact of debt on household finances during the recession and work to get out from under its influence before the burden becomes unbearable again.

Annual net result of consumer credit card debt Q1 2009 to Q4 2013

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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