Credit card debt is in dangerous territory. How dangerous? Let’s put it this way: Our total plastic balance is very near recession level.
America’s credit card tab currently stands at more than $830 billion, according to the Federal Reserve Bank of New York’s latest U.S. household indebtedness report.
The new figure represents an increase of $26 billion, or 3.2 percent, between the third and fourth quarters of 2017. It is also the highest total recorded since Q2 2009. At the height of the Great Recession in 2008, the total peaked at more than $870 billion.
At the individual level, the average American borrower today has a balance of $6,354 and owns 3.1 credit cards, according to Experian’s most recent State of Credit survey.
The survey also highlights regional, generational and state-by-state differences among credit card holders. Northeastern states, for instance, have the highest balances, whereas no particular region has the lowest. Gen X-ers, those born between 1967 and 1981, have the highest average credit card debt compared with the Silent Generation and Millennials, who share similar averages.
The central Federal Reserve also tracks credit card debt but reports a different, higher America’s spending has clearly been in a pattern of growth. Consumers are not paying off their debt fast enough, allowing interest to accumulate and keep them in debt. The share of consumers who became 90 or more days delinquent on their outstanding credit card balances has also been rising since Q3 2016, according to the New York Fed.
If you are struggling with unsustainable credit card debt, it’s time to consider ways to mitigate the problem. Americor offers a FREE debt analysis and consultation to evaluate your current financial situation.
By Dwight Flenniken