Granted, it might just a bit too early to say with some super confidence but it appears that consumers may be through shedding outstanding consumer debt.
For debt relief companies looking for a bit of good news and potential growth in the next 12-24 months, we’ll need to watch this trend carefully. For debt relief services this is the first really good piece of news I’ve seen in a while that would increase demand.
Of course I stand by my advice give in My Debt Relief Industry Forecast for 2012.
Some time will need to pass for consumers to load up sufficiently but they are at least poised to start building balances again, and they will.
Once they do start to reload it will take 12-24 months for them to reach the point of needing intervention. So this early sign is not an indicator that demand will turn around next month, but more likely to a year from now if the upward trend continues.
The other unknown factor is if banks are going to start issuing waves of new credit and how long the emotional sting of the last recession will last and continue to bring down consumer confidence which slows debt growth.
Some say consumers have learned a lesson and will not get in over their heads again. I disagree. In good time consumers are much more likely to feel overconfident and use credit to take actions that bring them pleasure on feel as if they improve their lifestyle.
According to the latest data from the St. Louis Federal Reserve, we are at a point where consumers are no longer shedding debt or deleveraging but are holding at a 0% growth, instead of a decline. If the trend continues, the next move will be slowly up.
Consumers on the Brink of Loading Up on Credit. Good News for Debt Relief Companies. by Steve Rhode
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