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Overwhelming debt hits Texas residents

According to a U. S. Federal Reserve report, consumer borrowing increased less than projected in February. Credit has gone up $8.7 billion, the smallest in four months - this after a corrected $18.6 billion gain in January.

These figures nevertheless represent overwhelming debt for Texas and the nation, but economists had predicted a $12 billion increase in the measure of revolving and non-revolving credit loans for February.

Smaller increases in borrowing show that American households are maintaining their habits of paying off their debt. Americans are also attempting to rid themselves of debt because they are more pessimistic regarding their financial situation.

Another report indicated that the economy generated fewer jobs than predicted in March, a signal that it might be some time before the general public takes on more debt. There was an increase in credit-card card debt in the past few months due to the holidays, but credit card borrowing has lessened.

Gains in numbers of employees increased 120,000 in March, the tiniest increase in five month, according to the Labor Department in Washington. The unemployment rate dropped from 8.3 percent to 8.2 percent primarily because people left the labor force.

Some observers note that consumer confidence even in the face of overwhelming debt has improved during recent months. Consumer confidence has grown, but budget-conscious customers still feel reluctant to spend more money.

Having said this, many Americans are still in debt and this also contributes to consumers not spending. Bankruptcy laws provide people in Texas with the option to discharge their debts, including credit card debt. Depending on one's circumstances and other available debt relief options, bankruptcy could be the right choice for debt-saddled people looking to solve their financial problems and achieve a fresh start.

Source: Bloomberg, "Consumer Credit in U.S. Rose Less Than Forecast in February," Alex Kowalski, April 6, 2012

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