A dollar sign followed by 13 digits tends to swivel heads. So credit card research site CardHub’s recent prediction that U.S. credit card holders will carry roughly $1 trillion in outstanding balances by the end of the year raises questions about how consumers are faring as debt levels grow. CardHub, which issued the forecast based on data from the Federal Reserve, warns that consumers may be on the path to spending beyond their means—a return to the bad habits that predated the 2007–08 financial crisis. Credit card balances recently sat at about $885.4 billion, by CardHub’s reading of the latest quarterly figures, compared with $832.5 billion a year earlier.
Finally, a look at other consumer debt provides some context. Credit card debt, higher than both auto loan balances and student loans in 2009, is now below both of those categories. Auto loan debt has reached $1.1 trillion, according to recent quarterly data from the New York Fed, although delinquencies still are a relatively manageable 3.5%. More worrisome is student loan debt, at $1.26 trillion. That’s a $69 billion increase from mid 2015, and the debt carries a 90-day delinquency rate of 11.1%, up from 8.5% at the end of 2011.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
-
The Trump GOP Tax Bill Could Worsen California Cost of LivingState Tax Energy bills in the Golden State may shock you if Republican lawmakers in Congress remove certain energy tax credits through Trump's 'big, beautiful bill.'
-
The Best Covered-Call ETFs to BuyCovered-call ETFs can provide consistent, above-average income generation, but they can also cap potential upside. Here's what to look for.
-
Federal Debt: A Heavy LoadEconomic Forecasts The debt continues to grow, but record-low interest rates could ease the long-term damage.
-
How the Fed's Moves Affect YouEconomic Forecasts It’s pumping trillions of dollars into the economy and keeping rates near zero. Savers are sunk, but borrowers get a boost.
-
Consumers Will Feel Impact of Rapidly Falling Interest RatesEconomic Forecasts Mortgage and car loans will experience the most significant dips, while some holders of Treasuries may get a slight boost.
-
Will You Have to Pay More Sales Taxes on Your Online Purchases?business One thing’s for sure: Consumers who live in one of the five states without a sales tax won’t be affected by the Supreme Court’s ruling.
-
Help Wanted in America: Skilled WorkersTechnology In an ever-more-competitive job market, technology increases the need for skilled workers.
-
The Unintended Consequences of a Boost in Overtime PayBusiness Costs & Regulation New rules mean millions more employees will be overtime-eligible. But will employers find workarounds?
-
America's Perilous National Debt
debt At $14 trillion and climbing, it's like "termites in the basement."
-
Savers Feel the Pain of Low Interest RatesMaking Your Money Last The Fed's low-rate policy has cost U.S. savers $470 billion.
