It’s 2007 all over again when it comes to our love affair with plastic.
After a few years of paying off credit card debt and helping the nation’s total stay under the $1 trillion mark, we’re back to approaching that enormous threshold. By the end of the year, total United States credit card debt will top $1 trillion for the first time, says a new report.
WalletHub, a personal finance website, released the results of a new entitled “2016 Credit Card Debt Study,” and the numbers do not bode well for the country.
The study found that U.S. consumers added another $34.4 billion in credit card debt during the second quarter of the year. This is the largest April-to-June accumulation since 1986, a time when Ronald Reagan was president, the New York Mets were on their way to becoming World Series champions and The Cosby Show was the most popular show on television.
Also, the charge-off rate was 3.13 percent.
“In Q2 2016 alone, we’ve racked up nearly half (48%) of the total debt accumulated in 2015 and almost matched 2012’s $36 billion increase,” the report stated.
“Q2 2016 shares important similarities with Q2 2007, which was six months prior to the start of the Great Recession. With 13 of the last 20 quarters reflecting year-over-year regression in consumer performance, we seem to be reverting to pre-downturn bad habits.
Researchers warn that consumers are “flirting with financial disaster” as the nation is on track to surge beyond $1 trillion in outstanding balances by the end of 2016. The average household debt balance will be $8,500.
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