The recent economic downturn has left an impact on almost every American. This blog previously reported that many individuals have had to turn to and rely more heavily on credit cards for day-to-day expenses. This has lead to a rise in credit card debt for many Americans.

New data suggests that the use of credit cards may be decreasing, but the amount of borrowing overall has remained steady.

Borrowing for the month of June increased $6.5 billion dollars from May. This increase is just lower than the all-time high set in June 2008. The data also showed that car and student loans accounted for the greatest increase.

But credit card debt fell $3.7 billion from May to June. This is only about 1 percent over the lowest debt level, which occurred in April 2011.

This could be evidence that high unemployment and slow economic growth have made many people more cautious about spending but more willing to invest in education to add skills. Student debt accounts for almost 35 percent of all consumer debt, making it the largest source of consumer debt after mortgages.

Overall, consumer debt has steadily declined since March 2008 due in large part to defaults such as foreclosures.

Fortunately, individuals facing mounting credit card debt do have options. One option is filing for bankruptcy. Chapter 7 bankruptcy is available to eliminate many different kinds of consumer debt including credit card debt. Other debt that can be discharged includes medical bills, secured loans and IRS debt. Unfortunately, student loans are generally not dischargeable in bankruptcy.

Source: The Sacramento Bee, "US consumers cut back on credit card use in June," Christopher S. Rugaber, Aug. 7, 2012