The United States Federal Reserve has spoken- credit card balances crossed the threshold of one trillion dollars in 2017. This happened even though card issuers post the 2008 Great Recession restricted the availability of credit. Marketing was also restricted. With the recovery of the American economy, credit card companies started to invest in a slew of new financial products. The companies began to take increased credit risk. Marketing activities are also accelerated.
Debt and top city
Credit card balances mirror an empirical improvement in consumer confidence and macroeconomic environment. There is, however, a fine line between consumer confidence and the macroeconomic environment. That borrowing continues to be under control as seen by few credit card defaults. Losses were also few. The future could be, however, be a little darker.
A few American cities have witnessed more growth in debt arising from credit cards compared to others. A total of three US cities stand out in this regard. Miami in Florida occupies the first position with an 8.6 percent growth in debt arising from credit cards. This has surpassed inflation. It must be mentioned that Florida witnessed a particularly brutal recession. House prices collapsed. That period is now over, with Case-Shiller Index exhibiting that prices of houses have nearly recovered. This swift increase in the credit card debt could be due to the latent demand post multiple austerity years. Credit card debt is now worryingly much quicker than salaries in Miami. Lenders have already started to analyze credit card patterns.
Pittsburgh and New York
Second in the credit card growth line is Pittsburgh, Pennsylvania with 5.9 percent upside in credit card debt. The city is an example for other American metropolises that are trying to re-position themselves into service-centered economies. The city benefits from the presence of first-class universities like Carnegie Mellon. This availability of intellectual capital has led to the birth and growth of technology companies. Google has a presence in the city. Among all American cities, Pittsburgh ranks second among millennials wanting to set up a home. Analysts have noted that new residences frequently require new renovations and appliances. Homeowners charge these expenses to credit cards.
New York comes third with 5.3 percent growth. An average New York resident enjoys about $6,125 credit card balance. This figure is a rise of about five percent. Wall Street, which has caused the Great Recession, has also assisted the city to recover. There is an increase of 2.4 percent in salaries in the city.