Credit card debts on the rise in the United States in 2016
Sometimes, credit card usage is a must. Maybe you need to make a payment and you’re getting paid a day later, so you want to make sure you don’t miss it. Maybe you have a vacation you want to plan, and the card provides you with an easier way to protect your funds while you’re overseas. Whatever the reason is, credit cards can be helpful, but they can also get you into trouble.
Credit card debt can get out of control quickly, but there are ways to get a handle on your debts. Interesting, a recent report has indicated that credit card utilization has risen again, and it’s rising at a pace that hasn’t been seen since 2008. What does that mean for the United States?
It’s a major concern. It could mean that the economy is poor, making it difficult for individuals to afford the things they need. It could also mean that people feel more comfortable with their jobs or incomes and are willing to spend more on credit.
Since the Great Recession in 2008, credit card debts have been lower, but in 2015, the fourth quarter resulted in higher credit debts being accrued than the post-recession average. In 2015, the overall outstanding credit card debt was $917.7 billion, higher than it was in 2007. In each home, the average debt owed is around $7879, still lower than the average level in 2008, but not by much.
Incomes haven’t risen much in the last decade, so this is a concern for many economists. Even though the housing crisis put pressure on consumers in the past, reaching a tipping point where you can’t make payments can still happen and result in debt that spirals out of control.
Source: The Street, “As Credit Card Debt Surges, Is 2016 the Next 2008 for the Credit Markets?,” Janet Morrissey, March 09, 2016