WASHINGTON–While Americans have now charged their way to more than $1 trillion in credit card debt, WalletHub’s analysis of the most recent data from the Federal Reserve Bank of New York shows inflation-adjusted debt levels have been higher numerous times in the past.
In fact, said WalletHub, adjusted for inflation, credit card debt actually reached its all-time high in Q4 2008.
“When you account for the massive impact inflation has on balances as well as the fact that debt-to-deposit levels are roughly 50% below the peak, U.S. households are actually in a lot better shape financially than it seems at first glance,” said Odysseas Papadimitriou, WalletHub CEO. “Inflation is masking the fact that people are actually managing their debt better than they have in the past.”
The Key Stats
In releasing its new analysis, WalletHub noted:
- Face Value. In absolute terms, U.S. credit card debt has never been higher than the $1.031 trillion owed as of Q2 2023.
- Inflation-Adjusted. When adjusted for inflation, it’s clear that U.S. households owed more to credit card companies from 2006 to 2009 as well as around 2019. Currently, total credit card debt is 18% below its inflation-adjusted peak.
- Household Average vs. Breaking Point. The average household had $8,668 in credit card debt at the end of Q2 2023, which is 20% below the record on an inflation-adjusted basis.
- Credit Card Debt to Deposits Ratio. The ratio between credit card debt and deposits has been shrinking since 2003, when it was at 15%. Currently, credit card debt represents 6% of deposits.
- Total Debt to Deposits Ratio. The ratio between total household debt and deposits has been going down over the years, and it is still below pre-Covid levels as well as roughly 50% below the peak from the early 2000s.
The full analysis can be found here.
How to Get the Daily CU News Headlines In Your Inbox Each Day, For Free!
The biggest, best and freshest news reporting in credit unions remains free in ’23! Each morning CUToday.info delivers its daily Fresh Today news update offering the latest headlines and breaking news right to your email, with the easy-to-read headlines format allowing you to click on the stories that interest you most in order to learn more.
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties, and we will not be contacting you to sell you an extended warranty or sending you any links so you may cash in on an inheritance you didn’t know was coming.
And did we mention it’s free?
Please note and/or make your IT department or email administrator aware the emails will be coming from the domains CUTodayinfo.com and CUTodayinfoReply.com.