Though defaults on credit card payments reached a six-year low last year, Kentucky and the rest of the United States added a record-breaking $57.1 billion in net credit card debt. These and other findings related to American consumer debt are based on the results of a recently released CardHub survey.
Net credit card debt increased for the fifth year in a row, and Americans added 47 percent more in 2014 than in the previous year. These increases in net credit card debt follow the nearly $1 million decrease that occurred in 2009 after the financial industry crisis.
At the end of 2014, the average household’s credit card balance was $7,200, which is approaching the credit card debt level of $8,100 that CardHub considers an unsustainable level. In January 2015, the total revolving debt totaled $867 billion, and it is predicted that the level of new credit card debt added by U.S. consumers will exceed $60 billion by the end of 2015. If the prediction is accurate, then the revolving debt balance will climb nearer the record high of $1 trillion that was reached in 2007.
Recent trends in unsecured debt such as credit cards are believed to reflect increased confidence in the state of the economy. However, these increasing levels of confidence may result in unmanageable levels of debt. Debtors facing defaults and experiencing difficulty while repaying debt might consider seeking the counsel of an attorney who might offer guidance on consumer rights, legal options with creditors and the possibility of filing for bankruptcy.
Source: CNBC, “Americans took on $57B in credit card debt in 2014,” Jacob Pramuk, March 9, 2015