A Silver Lining to Skyrocketing Credit Card Debt? You Heard Right

A Silver Lining to Skyrocketing Credit Card Debt? You Heard Right

There's no getting around it: Americans' credit card debt is skyrocketing.

According to a new CardHub study, consumer credit card debt increased by a whopping 47%, or $57.1 billion, in 2014. And in 2015, CardHub predicts we'll incur another $60 billion.

But whether these numbers spell trouble for the national economy is still unclear.

On the one hand, Americans may be oblivious to the lessons of the recent downturn and spending far beyond their means.


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After all, household earnings have increased just 2% in the last decade. Yet the average household's credit card balance has hit about $7,200—not so far from $8,300, the level that CardHub deems unsustainable. Average credit card balances last reached $8,300 in 2008, when the economy started to tank.

“The prodigious amount of debt that we continue to rack up indicates that consumer attitudes toward money have not improved since the Great Recession,” the study notes.

On the other hand, the increase in consumer debt suggests that Americans' faith in the economy—and in their own career prospects—is more or less restored.

What's more, Americans seem better able to deal with their debt than they've been in the recent past. The credit card charge-off rate (the percentage of debt declared “unrecoverable” by credit card companies) is currently hovering at 2.9%—the lowest it’s been in 30 years.

“This speaks volumes about the strength of the economy, indicating that more people have jobs and are able to stay current on their financial obligations," the CardHub study explains.

If you’re looking to pay off your own credit card debt, check out Debt 101 to help you start making progress on your money today.


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