Are Americans Still Addicted to Credit Card Debt?
While the side effects of the Great Recession are still persisting throughout Main Street, some Americans are once again feeling confident with higher debt levels. After making significant progress in recent quarters, credit card debt is making a comeback.
Consumers are having a difficult time abstaining from plastic. In 2013, the nation added $38.2 billon in credit card debt, up 8 percent from the $35.2 billion gain in 2012, according to a new analysis from CardHub. Despite paying down $32.6 billion in credit card debt in the first quarter, consumers added $42.1 billion of debt during the fourth quarter, representing the biggest quarterly increase in two years.
“Context is extremely important when it comes to evaluating credit card debt trends,” CardHub CEO Odysseas Papadimitriou said. “One could easily come to the conclusion that 2013 was a healthy year for consumer spending given the fact that outstanding credit card debt increased only $10.4 billion while defaults fell 16.7 percent. But that would fail to take into account the $27.7 billion that we defaulted on, yet still owe. As has been the case in recent years, the first quarter of 2013 was the only one in which we paid down debt.”