Americans added $60.4 billion to their credit card debt in the fourth quarter of 2016, the largest fourth-quarter debt increase since 2007. For the full year, U.S. consumers added $89.2 billion to their credit card debt and closed the year with a whopping $978.3 billion owed on credit cards.
The data were released Wednesday by personal finance firm WalletHub. Researchers now project that the total U.S. credit card balance at the end of 2017 will grow by $100 billion, pushing total debt well above the $1 trillion mark for the first time ever.
The average indebted household’s balance rose to $8,377 in the fourth quarter, just $86 below the all-time high of $8,463 posted in the fourth quarter of 2007.
To say the WalletHub researchers are concerned is, perhaps, an understatement:
So it is not a question of whether consumers are weakening financially, but rather how long this trend toward pre-recession habits will last and just how bad it will get.
The net addition of $60.4 billion in new credit card debt in the fourth quarter is nearly 54% above the average for the years since the Great Recession. The $89.2 billion in new debt posted in 2016 is the largest increase since 2007 and 145% above the average since the Great Recession.
Fueling the rise in credit card debt is a near historical low charge-off rate for bad debt. As long as U.S. consumers continue paying their bills, lenders will continue extending credit. The day of reckoning eventually will come, according to WalletHub.
For more information and data visit the WalletHub website.