WASHINGTON– WalletHub has released its latest Credit Card Debt Study, which found that consumers racked up $77 billion in credit card debt during 2019, sending outstanding debt to an all-time record high.
In fact, a new survey found many people would agree to house arrest for a year in exchange for credit card debt freedom.
Separately, WalletHub also released its nationally representative 2020 Debt Survey, which highlights consumers’ feelings about over-borrowing, including the fact that 95 million Americans admit they’d go into debt for frivolous purchases.
“The debt picture is worrisome nationwide, and the concerns are certainly compounded by the spread of the coronavirus. Some areas have bigger payment problems than others, though,” WalletHub said.
The company said it compared the amounts owed to credit card companies by people in more than 2,500 U.S. cities, and specifically, how those balances changed in 2019.
Cities with the biggest debt increases included La Mirada, Calif.; Texas City, Texas, and Beverly, Mass. Cities with the biggest debt paydown included Encinitas, Calif., McLean, Va. and Moorpark, Calif.
Other Findings
Among the other key findings in the research, according to WalletHub:
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Expect a debt-driven 2020. WalletHub projects that consumers will rack up another $85 billion in credit card debt during 2020 and approach $1.16 trillion in balances owed by year’s end.
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Money problems make us moody. More than 4 in 10 people (44%) say credit card debt makes them feel stressed, WalletHub found. Roughly 11% of people say credit card debt leads to feelings of depression.
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Recession fears vary by political party. Twice the number of Democrats than Republicans think another recession will happen within one year.
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The bill will come due for Millennials. Young people are 27% more likely to go into credit card debt for frivolous purchases than people over the age of 59.
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Millions would bare-all before exposing their finances. Women are 48% less likely than men to be embarrassed by people seeing how much credit card debt they have.
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Balance transfer offers are still attractive. The best balance transfer credit cards currently offer 0% APRs for the first 15-21 months with no annual fee and balance transfer fees as low as zero. “Such deals likely will not be around for too much longer,” WalletHub said.
- Desperate times breed desperate measures. More than one-third of people (37%) say they would do anything to get out of credit card debt. Millennials are three times more likely than Baby Boomers to agree to house arrest for a year in exchange for credit card debt freedom.
What’s Ahead
Looking to the future, WalletHub CEO Odysseas Papadimitriou added, “U.S. credit card debt will increase by an estimated $85 billion in 2020, according to WalletHub projections. That would push the average household’s balance to $9,755 and bring our collective credit card debt to roughly $1.16 trillion. Credit card debt levels are so high now that even a big increase can seem like a drop in the bucket. For context, $1.16 trillion is roughly three times as much as the federal government will spend on net interest payments toward the national debt this year.”