`Easy' money leaves many indebted to their future

Consumer spending is expected to remain at record levels into the 21st Century.

``I haven't noticed any reduction, that's for sure,'' said Gregg Dickerson, consumer loan manager for IH Mississippi Valley Credit Union's East Moline office. ``There's a continuous trend toward borrowing.''

The booming economy, low interest loans and easy access to credit all are reasons for a surge in spending during the last few decades. Mr. Dickerson has been with IH Mississippi for 22 years and has watched a steady rise.

``We've all been barraged by credit card applications every day,'' he said. ``And I don't see any indication that there's a letup in spending.''

Mr. Dickerson said some of today's spending patterns can be attributed to a stable economy since the late '80s. He said many younger people and Baby Boomers setting the pace never have lived through a depression, and faintly remember the hard times of the recession during the early '80s.

``Especially the young people don't know the hard times,'' he said.

People borrow for various reasons; to keep up with the Joneses, instant gratification and easy credit availability. But the move toward greater debt only seems to be compounded with the strong U.S. economy and low interest rates on savings accounts, Mr. Dickerson said.

``More people are borrowing at younger ages than ever before,'' he said. ``Young people are spending more from age 18 and up.''

Lower interest rates for savings accounts have some consumers looking for alternatives ways to invest. Mr. Dickerson said the stock market has been a more appealing option for many.

``It appears to me people don't save with the idea of buying for the future,'' he said. ``Also, there are more options for saving than there have been for conventional savings plans in the past. The stock market can have a greater return on investments.''

Mr. Dickerson said he has no predictions on future spending patterns, but said so far there has been no decrease in the amount of debt consumers are amassing. He said marketing and advertising tactics often can lure consumers into a buying trap.

A jump in credit card debt accounts for much of the rise in consumer spending, said David Sandor, a spokesman for Avco Financial Services' corporate headquarters in Dallas.

Mr. Sandor said increased consumer debt is a reflection of a strong economy and promotes growth and creates new jobs.

``Debt is an interesting word and not necessarily a bad one,'' he said. ``When consumers spend more money, it fuels the economy.''

A low inflation rate has jump-started spending sprees by many consumers, Mr. Sandor said, which has led to income raises, allowing people to compensate for the debt.

Mr. Sandor said consumer debt often can mask consumer savings. People are able to take advantage of low-interest bank or credit union loans and transfer balances from high-interest credit cards.