Here’s How Much an American Household Owes in Credit Card Debt

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MoneyUS credit card debt equals debt of Canada, France, Japan, Mexico, Russia and China put together.

62 percent of Americans are under credit card debt they cannot pay off.

A study by Fifth Third Bank revealed that 70 percent Americans are under debt and financial hardship.

Alarmingly enough, an average American household owes $7,879 in credit card debt alone, the highest since the recession. If that sounds worrisome, there’s more. Yet another survey revealed that recent college graduates choose to remain ignorant about the student loan they owe. Nearly half of them (45 percent) didn’t know what percentage of their salary goes to paying loans and 15 percent of them are unaware of how much they owe.

Key numbers:

  • In 2015 alone, credit card debt rose by $71 billion.
  • Americans spent $52 billion in the fourth quarter of 2015,  mostly due to holiday shopping and this equaled credit card debt during the entire years of 2009, 2010 and 2011 combined.
  • The delinquency rates on credit card debt is 2.17 percent, the lowest since 1991.

Some experts might argue that rising credit card debt is a healthy sign of consumer spending. However, that needs to be consistent with wages. America added 242,000 jobs in February but wages took a hit. According to Labor Department statistics, average hourly earnings dropped by 0.1 percent, declining for the first time since December 2014.

Does this portend a warning signal for investors buying loans?

Last modified: April 8, 2016

Category: Loans

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