Credit card debt has been shrinking across the country for two years. This positive trend has been seen as both a reflection of banks being more cautious with offering credit, and of consumers being more cautious with their spending. Even though there is still a high rate of filings for personal bankruptcies, many experts were predicting that the rate of bankruptcy filings would go down if credit card debt continued to shrink.

Now, though, there has been an increase in credit card debt. December 2010 saw the first increase in over two years. There was a $2.3 billion increase between November and December of 2010, bringing American credit card debt to a total of $800.5 billion.

The last increase, in August of 2008, came just before the financial crisis. That peak of $974 billion in credit card debt is still eighteen percent above the recent December numbers. Credit card debt is growing again, but is not yet back to pre-financial meltdown levels.

The December increase in some ways accounts for the strong holiday shopping season. The increase in debt could signal renewed confidence in the economy. On the other hand, it could mean that more people became desperate enough to start borrowing in order to pay for basic necessities. People may be trying to start businesses with money borrowed from personal credit cards, since banks have become tighter with offering business loans.

Non-credit-card consumer debt rose 1.7% in 2010, but credit card debt fell 7.5%, according to the Federal Reserve.

Fort Lauderdale credit card debt reduction attorneys noted that non-credit-card loans also grew in December, including auto loans, student loans and other personal loans.

Source: L.A. Times "Credit card debt rises for first time in two years" 2/7/2011