Just about everyone is at the very least thinking about reducing their level of debt. It is no fun walking around from one day to the next, owing creditors thousands of dollars. And while not everyone will take action to reduce their consumer debt levels, the fact that people are becoming more informed about dealing with debt is most definitely a good thing. A recent study indicates that by the end of the year credit card debt here in the United States is going to rise to… wait for it… a stunning $55.billion. The study that revealed this new figure was conducted by CardHub and used information from the Fed’s preliminary G.19 consumer credit report.
According to this report, American consumers paid nearly $35 billion toward their credit card debt in just the first quarter of 2015. This represents a seven percent increase from the first quarters of 2013 and 2014. Some of this increase has been attributed to factors, like the reception of annual bonuses, New Year’s resolutions and people getting their tax returns. Whether or not these things contributed toward debt payments being so low at the beginning of 2015 has yet to be determined. The bottom line seems to be that there was just more debt to pay in 2014 than there had been previously.
Previous year’s studies have usually shown that the 1st quarter of the year regularly results in plenty of debt being paid off, only for that debt to raise back up over the remainder of the year. Going back as far as 2009, the first quarters of each year showed the average pay off level reaching $35.9 billion with the median amount being about $33.5 billion.
Back in 2009 American consumers paid off about $874 million in debt. By the time 2010 rolled around debt began to eclipse payment levels by about $2.5 billion. And when it got to be 20111, things got even uglier, with the level jumping 1,696 percent. The year 2012 saw things settling down by about $12 billion, but credit card use was still on the rise. Debt increased in 2013 by nearly $39 billion, and didn’t slow down in 2014. That year, debt increased by $57 billion. There is no doubt about it – credit card debt can increase so quickly that it is no wonder it gets out of control on a nationwide level. According to data provided by CardHub’s study, American consumers currently owe about $831.2 billion in consumer credit card debt, with the average per-household amount being $7,177.
As 2015 crept into the final quarter, the Fed’s G.19 report indicated that debt levels were continuing to rise. Revolving debt (think credit cards here) rose up to nearly $900 billion, and that after staying close to the $890 billion mark since the fourth quarter of the previous year. Credit card debt, however, was not the only type of debt to increase. The total amount of consumer debt – revolving debt, student loans, car loans, etc… – rose nearly $21 billion dollars in April of 2015. With that debt tallied in the complete number for total debt levels settles in at $3.384 TRILLION!
As much information as people have about the importance of avoiding getting into debt, it is almost shocking that debt levels continue to increase. But, with employment issues and salaries pretty much stagnating in recent years, it is understandable that many working class American consumers are simply relying on their credit cards and other forms of credit in order to just keep their heads above water each month.