Consumer Debt Is Up - Other News

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Other » Consumer Debt Is Up

Consumer Debt Is Up

Consumer Debt Is Up
March
16
The content is accurate at the time of publication and is subject to change.

Consumer debt has hit the $1 trillion mark – and this is a first, according to a new study by WalletHub.com. This news comes after consumer debt reached $92.2 billion last year, which has not happened since before the Great Recession hit in 2007.

They also point out that this kind of spending upswing has only occurred four times in the last three decades, and during those times, charge-off rates went up the subsequent year. Right now, though, the charge-off rate is at a record low. With this in mind, lenders are on track to keep extending credit.

Statistics about consumer credit card debt are used to gauge how financially healthy American families are, but they can also indicate if an over-borrowing bubble may be forming. According to the study, this latest trend may not be good news, and consumers are embracing pre-recession spending habits.

Upswings and regressions

During the last quarter of 2017, consumers added $67.6 billion in credit card debt, making it the biggest upswing in the last 30 years. That’s 68 percent more than the average credit card debt after the great recession.

In dollars and cents, this meant that consumers rang in 2018 with $92.2 billion in new credit card debt, which is 105 percent over the post-recession average.

What does this mean for the typical family’s credit card balance? On average, families are carrying $8,600 in debt, which is $138 more than the amount WalletHub believes is sustainable and up from $8,131 during the last quarter of 2016. This represents a 6 percent upswing in credit card balances.

Tips for getting debt in check

All of this is food for thought when it comes to individual levels of credit card debt, and for those looking to avoid issues, there are things you can do to stay out of trouble.

First things first, WalletHub suggests making a budget and sticking with it. That said, ranking your expenses can help you keep on track, with payments and emergency fund savings an important part of the mix. Once everything is written down, you may see some areas where you can cut needless expenses.

Having an emergency fund is important. This way if anything unexpected happens, such as car repairs or medical expenses, you have a cushion to rely on. They suggest saving about a years’ worth of income if you can.

Increasing your credit score is part of the equation, too. Why? It’s pretty simple – the better your credit score, the cheaper your debt is. That can make it easier and faster to pay off.
Going with the Island Approach strategy is also one of their suggestions. What is it? It means using different credit cards for specific purposes. For instance, you can use a 0% APR balance transfer to reduce the cost of your current debt and pay it down.

On the other hand, you could use a rewards credit card to rack up miles that you can use for vacation, or you could use a cashback card to save on monthly expenses. But here the goal is to pay off those cards every month.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

Credit Card Debt Weighs Heavy on Young Americans
Credit Card Debt Weighs Heavy on Young Americans

Posted: May 09, 2018

Debt is a big concern for many Millennials, according to a new study out by Clif Bar, finding that for 56 percent of young Americans (18 to 34 years old) education-related debt makes it hard for them to look for a job that would be... Continue reading
Consumer Debt Is Up
Consumer Debt Is Up

Posted: July 05, 2018

While mortgage-related debt is down by 5.5%, consumer debt in general is on target to exceed peak 2008 levels by as much as $1 trillion, according to a new study by LendingTree. They found that for the most part this upswing is due to in... Continue reading
Home Equity Lines of Credit Are in Style
Home Equity Lines of Credit Are in Style

Posted: January 04, 2018

Winter is a time for skiing, snowboarding and ice skating, but for some it is also a time for home improvement. According to a new study by TD Bank, people will be doing just that this season and they will be using a home equity line of... Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate.
For Excellent, Good Credit
INTRO OFFER: Discover will match ALL the Miles you've earned at the end of your first year, automatically. For example, if you earn 30,000 Miles, you get 60,000 Miles. That's $600 towards travel!
For Excellent, Good Credit
Earn 2% cash back on purchases: 1% when you buy plus 1% as you pay
For Excellent, Good Credit
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!