Credit card debt in the United States is on the rise again, and Americans have even broken their previous record, set in 2008, of $1.02 trillion in revolving debt, which includes credit card debt and other charge accounts. The new record, set in early August, is $1.021 trillion in credit card debt.
The amount of credit card debt has been growing at a clip of about percent a year, largely because credit card companies have loosened their standards somewhat and are allowing more people to have access to credit cards. In the first quarter of this year, for instance, 171 million people had some sort of credit card or at least access to a credit card, whereas the pervious high water mark was 162.5 million people in 2005.
While companies are more willing to lend to people who present a larger credit risk, these companies are giving them a short leash with respect to credit limits. It is people who present safe credit risks who are more likely to enjoy the higher limits, which companies have overall been offering.
The amount of credit card debt which is overdue also has spiked somewhat. Recently, a financial organization reported that 4.4 percent of credit card debt became delinquent; at the same time last year, the delinquency rate was 3.5 percent.
What these numbers mean remains the subject of further study and do not necessarily spell economic trouble on the horizon. However, what they do undoubtedly show is that many Americans, including those in Southeastern Tennessee, may be struggling with their credit card debt load right now, or could just be one crisis away from such a struggle. For such people one option is relief through the bankruptcy system.
Source: MarketWatch, “One major way U.S. credit card debt is getting worse,” Maria Lamagna, Aug. 17, 2017