Study: Americans Charged $21.9B in Third Quarter, Could End 2016 $80B Deeper in Debt

By Barbara Hollingsworth | December 23, 2016 | 10:48am EST
(AP photo)

( – Americans racked up $21.9 billion in personal credit card debt during the third quarter this year and are likely to end 2016 with a net $80 billion increase in debt, according to a study by WalletHub.

At the end of the third quarter, Americans owed $927.1 billion on their credit cards, “almost exactly as much as we did the quarter before the Great Recession,” the study noted.

“Outstanding credit card debt is at the highest point since the end of 2008, and Q3 did nothing to divert us from a collision course with the $1 trillion mark,” according to the study, which tracked credit card spending going back to 1985.

 “The average indebted household’s balance rose to $7,941 in Q3 – just $523 below the tipping point WalletHub identified as being unsustainable,” the study stated.

Although consumers cut their credit card spending during and after the Great Recession, the latest figures show that they are closing in on the $8,463 average owed on credit cards in the fourth quarter of 2007, which was the highest credit card debt load in the past 30 years.

“With 16 of the last 23 quarters reflecting year-over-year regression in consumer performance, it’s clear that we’ve reverted to pre-downturn habits,” the WalletHub study warned. “If charge-off rates begin to rise, things could get ugly fast.”

However, credit card debt is only six percent of the total $12.35 trillion debt owed by Americans, according to the New York Federal Reserve Bank’s latest Household Debt and Credit report.

Other debt includes:

  • Mortgages (68%);
  • Student loans (10%);
  • Auto loans (9%);
  • Home equity revolving lines of credit (4%); and
  • Other (3%).

“As of September 30, 2016, total household indebtedness was $12.35 trillion, a $63 billion (0.5%) increase from the second quarter of 2016,” the Federal Reserve report stated.

“Overall delinquency rates worsened slightly in 2016Q3, reflecting an uptick in early delinquencies. As of September 30, 4.9% of outstanding debt was in some stage of delinquency. Of the $609 billion of debt that is delinquent, $400 billion is seriously delinquent (at least 90 days late or “severely derogatory”).

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