Americans are fighting with debt and the outlook does not look like it will present itself with instant relief for those people. Jobs are becoming increasingly harder to come by as a greater number of people enter the work force than there are new job openings.
During the month of April, mortgage servicers reported that over 63,000 loans, which are backed by the Federal Housing Administration, had foreclosure proceedings started against them. These fallen loans are those that had been funded during 2008 and 2009. It is uncertain whether or not it is a beginning of a trend for mortgages given during this time or if it is just a jump as compared to other loans, but the outcome speaks for itself. More Americans are losing their homes due to their struggles with finances.
Another jump in numbers comes from the unemployment rate. United States employers added only 69,000 jobs in May which is the fewest addition in a year. It sounds like a lot of jobs, but since there were almost 650,000 Americans that entered the labor force, there are many remaining without jobs. The Unemployment Rate rose from 8.1% to 8.2%. These numbers do not include those who were all ready out of a job for at least six months. It is upsetting to look at the figures showing how many Americans are struggling with not just monthly costs, but keeping a roof over the heads of their families. Those who are underemployed, which includes those job-seekers who gave up looking for work. There are also part-time workers who are truly needing full-time work. The amount of Americans who have been out of work at least six months gained over 300,000 to a staggering 5.4 million.
With this news of the increase in home foreclosures and unemployment, we are also faced with the staggering numbers from reported increased credit card volume usage. Americans continue to use the plastic cards to keep up with monthly expenses. United States credit and debit card volumes showed an increase of almost 10% from March to April.
As we consider the amount of people who have no income, too little income, or are just making enough and then think about what they are doing to get by, I am instantly reminded about the sharp increase in credit card usage. What is upsetting to me is not that the cards are being used, but rather the long term payoffs which will or will not be paid swiftly by these financially struggling Americans. Too many Americans are all ready significantly in debt.
The use of pre-paid credit cards is increasing as well. These cards run the user no risk of over spending or creating overdraft fees. Consumers will load a certain amount onto the card and then use it like a checking account or credit card without the long term payoff afterward. You can reload money onto the card for a small $4 or $5 dollar fee or some cards will bypass or minimize the fee through a rewards program. People are willing to pay these fees ahead of time knowing the freedom that will come after the shopping spree. Some of the services offer budget applications and other tools which can help the user be better financially organized.
Debt everywhere is going no where but up for now, so it will be up to each individual to work hard in order to make ends meet.
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