Americans Expected to Add $54 Billion in Credit Card... - Other News

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Credit Card Applications » News » Other » Americans Expected to Add $54 Billion in Credit Card Debt

Americans Expected to Add $54 Billion in Credit Card Debt

Americans Expected to Add $54 Billion in Credit Card Debt
The content is accurate at the time of publication and is subject to change.

Consumers seem to be piling on the debt again, according to a recent survey that resulted from combining quarterly charge-off data and reports from the Federal Reserve. The survey attempted to pinpoint the actual amount consumer debt increased after factoring in all the bad debt that has been expunged from their records by lending companies.

Charge-offs potentially make calculating the amount of consumer debt tricky, because when card-issuers sell charged-off debt to collection agencies the amounts sold disappear from the roster of overall debt although consumers are still held responsible for settling those debts. Charge-offs have been declining over the past four months but there has been an upsurge as of late, according to Fitch Ratings.

The afore-mentioned survey projects that consumers will finish out 2011 $54 billion more in debt due to credit cards then at the start of the year. Last year, in 2010, only $9 billion was added to the total amount of outstanding credit card debt and prior to that, in 2009, the amount of consumer credit card debt nationwide was actually decreased. Americans currently have nearly $772 billion in outstanding credit card balances, according to Time’s moneyland.com.

The survey remarked upon the rapid rate at which consumers are accumulating new credit card debt, referring to it as a “very alarming trajectory.”

“A trend indicating that consumers are reverting back to pre-recession debt levels cannot be a positive sign for the long term,” the report said, according to an article appearing on thehill.com.

This credit card debt is in addition to the roughly 1.7 trillion dollar financial burden already being shouldered by consumers for non-revolving debt such as mortgages.

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