Consumer News

Consumer Debt, Consumer News

Consumers Turn to Credit as Prices Continue to Rise

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Consumer spending drives the U.S. economy, accounting for two-thirds—about 70%—of economic activity and GDP. Household spending rose 6.1% in the 12 months through August 2026, up from 4.3% at the end of 2025, as demand increased for food, travel, and household goods.

Between May and June, American consumers’ use of revolving credit grew 6%, encompassed mostly of what we spend on credit cards.

Research indicates that more consumers are using credit cards for essentials such as groceries, gasoline, and utilities. With essential costs rising faster than wages, many rely on credit to cover the shortfall.

While each consumer’s financial situation is different, there are ways to determine if you are carrying too much credit card debt.

Consider your answers to the following questions:

  • Is credit card debt affecting your financial and emotional well-being? High credit card balances can lower your credit score and create financial and emotional stress. As a general guideline, your monthly payments should not exceed 10 percent of your monthly income.
  • Are you making only the minimum payment? Credit cards often require low minimum payments, but being able to pay the minimum does not necessarily mean the debt is affordable. If you can pay only the minimum, you may be carrying too much credit card debt.
  • Is your credit card debt impacting your credit score? Credit cards can help your credit score- or hurt it, depending on how you use them. It is recommended that you keep your credit utilization below 30 percent. Having significant credit card debt can have a negative impact on your credit score. This can make other debts, like your mortgage and car payments more expensive.

As bankruptcy attorneys, we see credit card debt as one of the most common problems facing those with serious financial challenges.

Filing for bankruptcy is a viable option for those struggling with insurmountable credit card debt. Chapter 7 is the fastest form of consumer bankruptcy and forgives most unsecured debts like credit card debt, medical bills, and personal loans. There are certain qualifications a consumer must meet regarding income, assets, and expenses to file for Chapter 7 bankruptcy, which is determined by the bankruptcy means test.

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If you have questions on this topic or are in a financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can assist you and address all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild, and recover. The day you hire our firm; we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Bankruptcy Trends, Consumer News, Timothy Kingcade Posts

Fears of a Recession Grow as Trump’s Tariff Policy Takes Effect

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Several economic indicators point to a recession, including declining stock prices and a weakening consumer outlook. Consumer inquiries about bankruptcy surged during the first quarter of 2025 to the highest level since early 2020, reports LegalShield, which predicts “a potential wave” of bankruptcy filings this summer.

What do economists rely on to predict a recession? There are 10 indicators, some of which have been weakening before President Trump announced his tariff policy.

Shifting Stock Prices. In the aftermath of Trump proposing higher tariffs on April 2, the S&P 500 has dropped sharply, down 6% just in the two-plus weeks since then. Lower stock prices reflect declining consumer and business confidence.

Uptick in Foreclosures & Real Estate Trends. Certain real estate segments have shown weakness, with office buildings among the most stressed. A new sentiment survey among real estate investors, compiled by RCN Capital and CJ Patrick Co., dropped to its lowest level since it was started two years ago. The survey takes quarterly readings of optimism or pessimism among investors in residential properties.

Employment Uncertainty. The unemployment rate stood at 4.2% in March. While those numbers are not bad, jobless rates are not a leading indicator for predicting the direction of the economy.  However, if the economy does take a dive, unemployment rates will start climbing.

Credit and Interest Rate Movements. With inflation expectations rising, due to higher tariffs, the Federal Reserve is likely to face a tough choice between trying to boost economic activity while trying to keep inflation at bay.

Consumer Outlook and Expectations. Consumers are feeling uneasy about the economy, and that is showing up in the data. Even before Trump’s tariff announcements, consumer expectations were the component that weighed down the leading indicators index. Since then, things have worsened. A more current indicator of consumer sentiment tracked by the University of Michigan showed substantial drops in confidence as of early April, as people prepare for what they think will be rising unemployment and inflation.

Hours Worked in Manufacturing. One key goal of Trump’s tariff policy is to boost jobs in U.S. manufacturing. However, while manufacturing employment may rise, it will take time, years even, for improvements to be reflected.

New Business Orders. This includes consumer goods, and orders for non-defense capital goods. The group also compiles a separate index that tracks new orders. As of the most recent report published in March, one of these components showed weakness, another was flat, and the third, slightly positive. The Trump Administration has changed its tariff policy several times in recent weeks, creating the type of uncertainty that businesses fear.

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If you have questions on this topic or are in a financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Consumer News, Credit Card Debt

Credit Card and Car Loan Defaults Hit 10-Year High

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A number of consumers are defaulting on their credit cards and car loans to the point where the number of defaults reported are the highest seen since the financial crisis. With inflation not nearing an end any time soon and interest rates continuing to rise, the number of consumers defaulting is expected to grow.

This information comes from data provided by the credit agency, Equifax. The agency found that credit card delinquencies have hit 3.8 percent while car loan defaults have hit 3.6 percent. These figures are the highest ones seen in more than 10 years.

Car Repossession, Consumer News

Car Repossessions Hit a Decade High

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Car repossessions have reached a figure not seen in over a decade. According to Fitch Ratings, the number of subprime auto borrowers who were at least 60 days past due on their car payments increased to 5.67 percent (5.67%) from 2.5 percent (2.5%), which was the figure reported in April 2021.  

Numbers like these have not been seen since January 2009 when 5.05 percent (5.05%) of subprime car borrowers were at least 60 days late on their car payments during the peak of the Great Recession.

Consumer News

What Another Federal Reserve Hike Will Mean for Consumers

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With inflation continuing to cause problems for American consumers, financial analysts worry another Federal Reserve rate increase is on the horizon. No official news has been released regarding whether an increase will happen, but experts anticipate one in the near future. Its effects could prove to be damaging to the nation’s economy, however.

The Federal Reserve has already increased interest rates this year, and the effects have been felt. The cost of existing credit card debt has already gone up by just under $23 billion due to the Federal Reserve’s rate increases so far in 2022. If the Federal Reserve increases rates again before the year ends, existing credit card debt is expected to go up by another $3.2 billion. Additionally, WalletHub projects that consumers will end 2022 with approximately $110 billion more in credit card debt than they started the year 2022 with, which makes a national record.

Consumer News

Florida Sending $450 Check Per Child to Nearly 60,000 Families Across the State

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As the new school year approaches, low-income Florida families will receive a $450 check to help offset the cost of rising inflation. For those who have been worried about the legitimacy of the check, the good news is the check is not a scam but is, in fact, legitimate.

This year, a record state budget was signed into law by Florida Governor, Ron DeSantis. This budget included millions of dollars to provide one-time payments to Florida families with young children. These payments included parents with foster children, adoptive families, and single parent households.

Consumer News, Credit, Credit Card Debt

The Best Ways to Handle Your Credit During Inflation

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The cost of living has continued to rise throughout the first half of 2022, leaving many consumers struggling to make ends meet. It seems the cost of everything has skyrocketed, from groceries to gas. As a result, three in five American consumers say they are living paycheck to paycheck. Many of these individuals are relying on credit cards to pay for necessary expenses, but unfortunately, adding to their credit card debt only complicates financial problems.

Consumer News, Predatory Lending Practices

Consumers Being Lured Into Predatory Car Repair Loans

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Predatory lending practices are becoming more common when it comes to companies attempting to “help” consumer fund car repairs. Many of the major car repair shops, including AAMCO, Jiffy Lube, Midas, Precision Tune Auto Care, Grease Monkey, and Meineke, are offering financial assistance to consumers who are not able to pay for their car repair expenses. The problem is, these car repair loans can end up charging up to 189 percent interest, according to a recent study by Consumer Reports.

Many states have laws issuing caps on interest rates to avoid predatory lending practices. However, companies have become wise to these laws and evade them by teaming up with a bank in a state that does not have an interest rate cap. This practice is also known as “rent-a-bank,” and it falls into a legal gray area.

Consumer Bankruptcy, Consumer News

DeSantis Vetoes Florida Bankruptcy Relief Bill

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Gov. Ron DeSantis vetoed a measure last week that would have provided some much-needed relief for those struggling financially in Florida.  The specific measure, HB 265, was passed unanimously by both the state senate and legislature during the most recent legislative session, where it was quickly vetoed by DeSantis. This bill represents the third bill vetoed by the governor.

This bill would have given Floridians facing bankruptcy relief by providing them credit for any equity they may have had in their vehicle. The law would increase the bankruptcy exemption provided to debtors in their cars from $1,000 to $5,000.