WASHINGTON—Americans now owe more than $1 trillion in credit card debt for the first time ever, a new report indicates.
Cardholders added $92.2-billion to their card tab in 2017, a post-Great Recession record, according to WalletHub’s latest Credit Card Debt Study.
“Only four times in the past 30 years have we spent so much in a year. And in each of those prior cases, the charge-off rate – currently hovering near historical lows – rose the following year. There wasn’t nearly as much kindling on the fire, either,” WalletHub said. “So it’s not a question of whether consumers are weakening financially, but rather how long this trend toward pre-recession habits will last and just how bad it will get.”
Other key findings from the WalletHub study:
• The $67.6 billion in credit card debt that we added in Q4 2017 is the highest quarterly accumulation in the last 30 years – 68% higher than the post-Great Recession average
• The $92.2 billion in new credit card debt added in 2017 was the most for a year since 2007 and 105% above the post-recession average
• Since the end of the Great Recession, consumer performance has regressed on a year-over-year basis in two out of every three quarters
• The fact that charge-off rates remain near historical lows continues to fuel lenders’ appetites for extending credit, but there will be a tipping point eventually
• The average household’s balance, at $8,600, is $138 higher than the level WalletHub has identified as being sustainable
See infographic below for findings from WalletHub’s 2018 Credit Card Debt Survey.