If you listen to an economist of any stripe, he or she will inevitably talk about cycles. Much of the economy runs in cycles and economists love to point this out. While the COVID-19 pandemic may have introduced new buying and saving patterns for consumers, old habits tend to die hard. And after spending nearly two years cooped up at home and flush with cash, consumers are starting to spend again. To make those purchases, consumers are relying on the plastic in their wallets.

Consumer spending using revolving credit — like credit cards — is at its highest level since the pandemic hit in March 2020, and the amount of bankcard debt outstanding is also at its highest level since the pandemic struck the United States, too.

Where people used the initial period of the pandemic to pay down their debts and shore up their balance sheets, they are now not paying off their credit card balances every month like they were, showing everyone that the economic cycle is getting ready to complete yet another turn.

The Importance of Making Good Decisions

It’s important for consumers to continue making good financial decisions, especially since income tax refunds are likely to be less than they have been in years past, with many families receiving their child tax credits last year as part of an economic stimulus package meant to help people make it through the pandemic.

While the amount of credit card usage and debt levels are on the rise, they are not yet at a level where economists are worried about the impact that a spike in delinquency and default rates could have on the economy. But, if the cycles hold true, an increase in delinquency and default rates is on the horizon as consumers increase the spending they are doing, especially with credit cards.

For consumers who get into financial trouble, companies like Pacific Credit Services are here to help. The sooner that people start working on getting out of debt, the sooner that they can solve their financial problems and put themselves back on sound financial footing. The key is either to be proactive, or at least receptive to the ideas that companies like ours present. Because we want to achieve the same objective you do — helping you get out of debt.

Don’t be afraid to contact us and find out how we can help you. Reach out by contacting us at info@pacificcreditservices.com.