Americans are deeper in debt than ever before. Despite hopes that the economic collapse a few years ago would encourage consumers to start saving their pennies and begin to spend less, the opposite has happened: spending more, saving less.
A new report from CardHub finds that consumers racked up a significant amount of debt during the fourth quarter of 2015.
The “2015 Credit Card Debt Study,” which was released Tuesday, discovered that consumers added $52.4 billion in credit card debt between October and December of last year. This is nearly as much as the total amount Americans added to their collective tab in 2014, which was $57.4 billion. This means, there was a $71 billion net increase in credit card debt last year.
Today, the average household owes $7,879 in credit card debt. In total, the United States has exceeded $900 billion in credit card debt, a feat unseen since 2007. If the trend continues, consumers could surpass the $1 trillion mark in the coming years.
Here is a chart courtesy of CardHub:
CardHub warns that if consumers don’t start paying down their debts and just maintain the trend of adding more debt to the ever-growing pile then it could be very soon when we see default rates start to soar and credit availability diminishes.
The website puts forward a list of tips for managing debt:
– Make a budget and stick to it.
– Build an emergency fund.
– Improve your credit.
– Take on the island approach.
– Use the snowball method.
– Take a look at your job situation.
Leave a Comment