The number of loans issued to Americans has increased 7 percent at almost 40 percent, compared to 31 percent in 2017 according to Experian. Financial Planner, Derrick Kinney says the amount of debt will likely get worse, as more consumers are focused on whether they can afford a monthly payment as opposed to a one-time purchase. “I know we can’t afford it, but let’s at least do it, and we’ll find a way in the future to pay it off, often times and that can be a bad trend, financially for the economy as well.” He said.
Instead of scaling back and practicing moderation, more Americans are paying anywhere from 6 to as high as 36 percent, facing the situation adding to their debt. People must make tough choices right now. “There’s barely enough money to make all their bills and they want to do something for their kids. That’s the appeal of these personal loans. This could be a sign of weakness financially down the road.” Kinney said. It’s this attitude of buying now and dealing with the consequences later that gets people into trouble. Kinney said it’s like digging a hole with no bottom. This causes Americans to work longer prolonging their retirement as they must keep working to pay the debt down. It’s a vicious cycle.
As Americans are now looking at higher prices at the pump, this too isn’t lowering blood pressure. Texans are used to states like California and New York seeing higher gas prices. This is when Americans begin seeing where it hits home, at the gas pump and the grocery store.