The American dream has become the American debt trap.
During the economic downturn, millions of cash-strapped Americans relied on credit cards to pay unexpected medical bills or to weather unemployment.
Now, in an economic recovery enjoyed mainly by the wealthy, ordinary Americans can’t earn enough to pay off their debts or break their reliance on credit for basic needs, new studies show.
Credit has become so essential to survival that 20 million American households do not expect to ever live debt-free, according to a new survey by consumer research firm Mintel.
While consumer debt-per-capita levels have declined since the recession, New York’s overall level remains high, at $47,170, outstripping the national average, and student loan debt has grown.
This year, consumers are reversing their recent trend of paying down credit-card debt, and will add another $46.7 billion to their cards, according to the informational website CardHub.com’s latest projections. [...]
Research by think tank Demos shows similar trends. Car repairs, medical bills, rent and utilities comprised a large portion of average credit-card balances, which in 2012 averaged $8,278 for Americans over age 50 and $6,258 for those younger.
“What’s most troubling is that the proportion of households using credit cards to meet basic needs has stayed flat, not gone down,” says Amy Traub, senior policy analyst at Demos.