Credit card debt rose at the highest pace since 1995 through February. But there are some concerns. Issuers are being more cautious, McKinley said. They are not raising credit limits as generously as in the past, for example. Issuers learned valuable lessons from the last recession in the early 1990s, which prompted record numbers of people to file for bankruptcy in following years, McKinley said.
More caution is warranted, on behalf of issuers as well as consumers.
If consumers take on too much debt, overall spending could slow and lenders could have difficulty generating revenue. Lenders are operating in a different environment than in the last recession. Charges for items that were once taboo, such as groceries and income tax payments, are far more prevalent. A number of factors are pushing some consumers beyond their limits in the slowing economy. Higher gas bills and fuel costs in general have increased expenses while income is decreasing for some consumers because of the elimination of overtime in many cases and layoffs in others.