Current consumer credit debt should be monitored by card industry

Consumer credit card debt in the United States is increasing by tens of billions of dollars each year, and, as the numbers reflect a general ability to pay back advances effectively, one consumer advocate is urging more citizens to obtain electronic payment accounts.

Credit cards have various benefits

MSN Money partner Len Penzo advocated credit card use for responsible consumers on his blog, which may reflect a positive trend in the consumer credit industry - more stable borrowing habits are a good thing for traditional and alternative credit businesses. The basic ability to build credit through proper use of electronic payments is just one of eight major benefits he named, supported by the fact that credit cards often make buying services and products safer and more efficient for everyone involved. While he noted that many people who refuse to open an account with a major credit provider are worried about the risks of poor borrowing habits, they are missing out on advantages in purchase safety, emergency fund security and bonuses like purchase insurance that even the most active credit card users can overlook.

Consumers who have histories of poor lending habits and a general inability to live up to agreements may not the kind of people who should open credit card accounts, Penzo stated, as taking such action would be detrimental to the individual card holder as well as consumer credit data businesses that would be likely to have an unwilling debtor to contend with eventually.

Rising debt can be good and bad
It seems that the type of people Penzo would define as good credit card users are the consumers who make up the fabric of current card-using culture, based on a study conducted by CardHub. The survey showed improvements in debt reparation by credit card users in relation to previous years, which is promising for the industry moving forward. Last year rounded out with a total of over $36 billion taken out in the form of credit card debt. Odysseas Papadimitriou, CardHub CEO, said that while trends toward responsible credit card use are promising, consumer credit businesses should take caution to not let debt get out of control.

"The problem with rising debt levels is that we don't realize there's a problem until it's an insurmountable one," Papadimitriou said. "That's how consumers as well as banks get into trouble. We think there will be warning signs for impending calamity, but almost like with a tsunami, when the warning signs come, it's too late to get out of dodge."