Less Debt More Uncollectable Accounts

The debt of Americans is continually decreasing these past few years. From an average of $16,383 two years ago, it has fallen to only $14,517 this year. This has nothing to do with financial discipline, and certainly this is not very good news for the industry.

The decrease in the rate in 2010 was due to the uncollectable amounts that were write-off by the companies, and this may be the case for 2012.

It has been nerve neither racking for consumers that the rate of debt is not going down nor showing signs at all. Credit rate has continued to stay stable in 2011 and has not made no signs of change ever since. The largest decline in credit occurred in 2010 but the two years that followed did not follow its trend.

The only hope for consumers is the fast recovering economy of the United States from the recession it suffered from in 2008, and the fact that more credit lending companies are more open to lend to customers even if they do not have a spotless credit history. Furthermore, the high employment rate continues to boost the confidence of lenders.

But this current trend in the lending business poses a threat in the future. The more the economy becomes progressive, the more these financial intermediaries will take on risky decisions. This will lead to the eventual rise in the debt rate again. It is an unavoidable cycle that once too much debt is made, and then the economy will surely fall again.

As all of you might now, the top three debts that American households endure are housing loan in first place, followed by student financial loans in second and credit card liabilities in third.

Debt occurred by student loans make out a total of $1 trillion. Though credit cards could be a very hard deal, student loans are imposing a very high threat in the economy. The US president Obama is trying to get legislators to sign a law to address this problem, and hopefully they succeed.

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