Americans are racking up an enormous amount of credit-card debt, and there doesn’t seem to be any remedy other than self-discipline.
Even after an encouraging break in the trend, a spending spree at the end of last year has experts wondering where this is all leading.
CardHub.com is a credit-card comparison website owned and operated by Evolution Finance Inc., a company founded in 2008 in Arlington, Va.
The online credit-card marketplace conducts regular studies on the industry.
CardHub’s figures for 2013 indicated that Americans were actually improving their spending and payment habits in six of the last seven quarters. It appeared that consumers were trying to right their own ship, realizing they were sinking into dangerous debts levels.
But, after lowering their total debt level for the first nine months of last year, consumers went wild in the last quarter and finished the year with a $38.2 billion net increase in outstanding credit-card debt.
CardHub says that debt load represented an 8 percent move in the wrong direction when compared with figures for 2012. That prompted CardHub to predict a $41.2 billion increase for 2014.
Here are other figures CardHub listed in a recent news release:
U.S. consumers accumulated $42 billion in debt in the fourth quarter of 2013 alone. This represents a 5 percent increase over the fourth quarter of 2012. The fourth quarter is typically the most active of the year because of Christmas spending.
The fourth-quarter debt increase exceeds that for 2013 overall because consumers actually paid off $32.6 billion during the first quarter of the year. They then proceeded to wipe out that paydown, and more, throughout the rest of the year.
The average household’s credit-card balance is now $6,971 — an impossibly difficult amount for most households to handle.
The amount of credit-card debt on which consumers have defaulted in the past five years totals $267 billion. This, of course, is a bonanza for collection agencies but a disaster for struggling families.