Hudsonhubtimes.com - Capital News: $952 billion in credit card debt and still growing for consumers

by Marc Kovac, Capital Bureau chief

Did you get your rebate check yet?

Thinking about buying that new flat-screen television? Or a trough full of music, movies and video games? Perhaps some gaudy threads?

Before you do, consider this, from House Speaker Jon Husted: "As of February, the national consumer debt was $2.5 trillion, excluding home mortgages." Or, "Per capita, national consumer debt is $8,306. This includes both revolving and nonrevolving debt and excludes home mortgages."

Ouch.

The Republican from Kettering circulated those and other frightening debt tidbits to reporters in relation to the payday lending issue. His chamber passed legislation in late April capping the interest charged by such storefronts at 28 percent, limiting the amount consumers could borrow (up to $500 or 25 percent of their monthly pay, whichever is less) and the number of loans per year (four). And no more getting a new payday loan to pay off an old one.

Opponents have said the bill will devastate the payday loan industry, leading to closed businesses and thousands of lost jobs. Plus, they said, where will cash-strapped Ohioans go when they need short-term loans for emergencies? But proponents continue to point out the cycle of debt that traps people using payday lenders. Many take out two-week loan after two-week loan just to stay afloat.

It must be a lucrative business. Consider, as proponents of increased regulation point out, that the number of payday lenders has increased to about 1,600 from 106 a decade ago. Which is further evidence of the nation's mounting reliance on debt. According to stats compiled by Husted, consumers have about $952 billion in revolving debt (credit cards).

In January in February, consumers racked up another $10 billion in new credit card debt. That's not to mention mortgages, car loans and other nonrevolving debt.

"Our country -- and I mean our government [and] as a people -- we have a debt problem where we continue to get ourselves in situations that we make bad financial decisions that are trapping not just ourselves [but also] our children and grandchildren into a cycle of debt, both consumer debt and national debt," Husted told reporters. "I am very concerned about that. I can't emphasize to you enough how I think we slowly, as a nation, have gotten ourselves into the position where we are now dependent on other countries, other people, to basically buy our debt and keep us afloat.

"And if any one of those at any time decided that they want to switch gears on us, we'd be in real big trouble."

The national debt is about $9.2 trillion, or roughly $31,000 per citizen or $124,000 for each family of four.

"That's just, to me, very scary," Husted said. "We are not handling our financing responsibly, and we have to get people's attention to do that."

Marc Kovac is the Dix Newspapers Capital Bureau chief. E-mail him at mkovac@dixcom.com.