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Credit card debt soars during second quarter

Consumers in the United States accumulated $18.4 billion in credit card debt in the second quarter, according to a new report.

CardHub.com’s Q2 2011 Credit Card Debt Study indicated that the dramatic increase of consumer debt is 66 percent higher than consumer debt accumulated during last year’s second quarter and 368 percent more compared to the second quarter in 2009, according to DailyFinance.com.

“A debt increase of $18.4 billion during a single quarter is mind boggling, especially when you consider that this increase is 368 percent higher than what we witnessed in the same quarter two years ago,” Odysseas Papadimitriou, the CEO of CardHub.com said, DailyFinance.com reports.

The first quarter this year showed that consumers held a significant net decrease in credit card debt, similar to the first quarter in 2010. Consumers, however, wiped out the reduction in subsequent quarters last year.

A part of the increase was driven by consumers who have growing optimism about the economy, Papadimitriou said.

“Without being able to quantify this, my assessment is that the majority of the increase is attributed to the failure of many to realize that their disposable incomes will not be going back to ‘bubble levels’ anytime soon,” Papadimitriou said, DailyFinance.com reports.

Papadimitriou recommendsed that consumers focus on lowering the cost of their existing debt instead of increasing overall debt loads.

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