Why more Americans will fall behind on credit card bills this year

A quarterly report issued in December by the Federal Reserve Bank of New York notes that total debt held by Americans dropped by $74 billion in 3Q 2011, but our credit card debt rose by $2 billion in the same period. This means that as we are paying down our mortgages, we are running up high-interest debts elsewhere. We also added $18 billion in car loans and $23 billion in new student loan debt during the quarter. For the moment, Americans are staying on top of their bills. But with a less-than-stellar job market and economic uncertainty posed by incessant wrangling in Washington, economists fear that it will not take much to push those living hand-to-mouth into default (let alone set aside resources for things like financial planning).

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