Financial Mismanagement Main Reason for Credit Card Debt

June 17, 2009

With the recent 26-year high U.S. jobless rate of 9.4% in May 2009, it is easy to blame job loss as the main culprit for increasing credit card debt.

However, according to nonprofit NFCC(National Foundation for Credit Counseling) which helping financially desperate consumers, financial mismanagement is the main cause of financial distress. And job losses came in only second.

The number of people seeking help increase double-fold from 1.5 million in 2006 to 3.2 million in 2008.

What is more disturbing is people who seek counselling with NFCC had six credit cards with unsecured debt totaling 62% of their total household income. Be reminded that this debt is strictly credit card debt, not taking into account of their house or vehicle loan.