For months now, financial experts have emphasized the need for renewed consumer confidence to bolster the sagging American economy. According to data collected by the Federal Reserve, Americans did just that over the Black Friday weekend, to the tune of $52 billion. Unfortunately, that “money” was actually spent with the swipe of a credit card, a disturbing indication that even after three years of recession, the national love affair with “easy” money has not dimmed.

Debt Levels Show Only Minimal Improvement

How passionate is that affair? The surge in consumer borrowing for November 2011 was $20.4 billion, the greatest month-over-month leap in ten years. That debt is now tacked on to the total personal debt outstanding in the nation, which is just under $2.5 trillion excluding mortgages owed. Credit card debt after the November spending flurry stands at $798 billion. That is lower than the $800 billion owed at the end of 2010, but not substantially lower as economic experts had hoped.

The credit card industry has aggressively gone after new business with 0% APR offers on purchases and balance transfers with long promotional periods. Consumers have succumbed to the temptation of those offers, but they could be in for a bitter surprise if the economy takes another downward turn. The rate of personal savings has continued to decline and income growth does not currently match the rate of inflation.

Zero Percent Offers Tempt Consumers

A concurrent concern is that when the 0% promotional offers expire, cash-strapped consumers will roll their debt on to a new 0% plan, which will also carry a transfer fee, thus increasing the total debt load. In the past, consumers have used this strategy to ship debts around from lender to lender, and with longer offers, that practice is once again seeming attractive. In the long run, however, it simply extends the life of the debt and increases the amount owed.

Although retailers have expressed elation at the “success” of the holiday spending, which will likely be as large or larger for December when the numbers are tallied, the real implications of that spending are not positive. Although the causes of the economic recession that began in 2009 will likely be debated for years, the high rate of personal indebtedness in the nation made consumers unusually vulnerable. The collapse of the mortgage industry, high unemployment, and the volatility of the stock market that wiped out retirement savings for hundreds of thousands were, in effect, a “perfect storm.”

Increase Debt Threatens Economic Recovery

With no cushion against job loss, and no ability to resolve mortgage debt in the face of that income deficit, the epidemic of foreclosures was inevitable and catastrophic. Unemployment over the last three years has hovered between 8 to 10%, and now is not the time for consumers to be piling on more debt. Until the holiday season, the trend had been toward financial conservatism, loan consolidation, and debt resolution. The holiday spending spree, however, showed that this new discipline is weak at best.

Going into 2012 with essentially the same debt load they faced in 2011, Americans are, at best, holding the line in a weak economy. If they are lured back into the freewheeling use of credit, dangled by long pay-off periods at 0% interest, the very thing economists have dreaded, the potential of a double-dip recession, could become a reality.