Rising gas prices could keep consumers from paying down credit debt

Recently, consumers have been filtering most of their monthly earnings toward paying down past bills and credit card debt, while cutting their overall spending.

This could change in the coming weeks, as some experts predict gas prices, which have risen sharply over the last few months, could continue to edge higher in 2011.

“We continue to demand more,” former president of Shell Oil, John Hofmeister, told The New York Times. “The world continues to demand more, and the U.S. has no plan to address it. That could drive us to the kind of numbers that get to $5 a gallon in this country.”

In addition, the newly elected Congress may not be able to pass significant legislation in time for this predicted rise, the news source says. However, while oil companies and trade groups have outlined plans for increased production, this too may not be able to cut prices in the short term.

The national average price of a gallon of gasoline hit $3.12 this week, up nearly 25 cents from Thanksgiving prices. Given the recent predictions, many consumers would be wise to factor in the change to their budgets, or else they could risk putting more debt on their already overburdened credit cards.

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