It’s official. The Federal Reserve confirmed that Americans are suffering from the most outstanding revolving debt, also referred to as credit card debt, in U.S. history. The statement released places June 2017’s figures at $1.021 trillion and tops the previous record of $1.02 trillion, which hit the country way back in April 2008.
According to MarketWatch, credit card debt in the U.S. has been increasing at an annual growth rate of 4.9% and it seems that one of the major causes could be attributed to the recent behavior of banks and credit card issuers. Essentially, more consumers are being granted access to credit cards; 171 million, to be exact, during the first quarter of 2017 and credit reporting agency, TransUnion (TRU), confirms that more consumers are being given credit cards with lower spending limits.
What does this mean for the average American?
As credit card debt rises, the average American is left trying to figure out how to meet credit payments and manage levels of debt that the country is unaccustomed to dealing with. Now, more than ever, people are seeking out the expert advice of companies trained in debt consolidation and credit repair.
A review of CreditRepair.com gives comparisons of what various companies offer and are also an opportunity to gauge what to look out for when choosing a credit repair company to rely on. It’s possible to focus on the details of companies like Lexington Law and Sky Blue and learn what they have to offer in contrast to similar organisations.
The consequences of credit card debt
With The Federal Reserve’s official warning ringing in our ears, we know that consumers are already struggling with credit card payments. As Business Insider most dutifully points out, credit card debt is generally the most expensive and riskiest of debts for consumers. It also happens to be the most profitable one for banks, (surprise, surprise).
While consumers are able to refrain from seeking bankruptcy protection, U.S. banks are unlikely to be in any real danger. Current statistics seem to indicate that unemployment will do nothing but continue to fall during 2017, which means that it’s most likely going to be the consumer who continues to suffer the consequences of the country’s escalating credit card debt in the near future. The great financial loss is, most definitely in the hands of the average American.
Number crunching the credit card debt crisis
So, with the current situation as it stands, Value Penguin chose to dig a little deeper to offer up a detailed cross section of U.S. credit card debt in layman’s terms.
By combining data available from both the U.S. Census Bureau and The Federal Reserve, Value Penguin confirmed that 38.1% of all households are experiencing some kind of credit card debt. Households with the lowest net worth (zero or negative) have debts of approximately $10,308 registered on their credit cards and average credit card debt varies significantly by state or region, with Alaska’s debt topping the bill at $10,091 and Ohio coming in last at $4,823.
It’s in our hands
To sum up, 2017 has been openly dubbed as the worst year for credit card debt since the Great Recession of 2008. Now is the time for preventive action. While the initial benefits of accessing credit cards with lower lending limits may seem attractive, it doesn’t necessarily mean that our financial situation is solid enough to support us as we choose to live on a constant stream of credit.
As the only ones set to suffer from the country’s soaring credit card debt, it would be best to err on the side of caution and reduce our credit card spending as soon as possible.