Skip to main content

Will Credit Card Debt Hit The Trillion-Dollar Mark?

Phil Hall
Jun 08, 2016
The American public received a financial check-up and the results are somewhat problematic: Repayment on credit card debt during the first quarter was the lowest in eight years

The American public received a financial check-up and the results are somewhat problematic: Repayment on credit card debt during the first quarter was the lowest in eight years, and a $1 trillion credit card debt level is being forecast for the end of this year.

According to new data from CardHub, Americans repaid just $26.8 billion in credit card debt during the first quarter, which is the weakest first-quarter pay down since 2008. Odysseas Papadimitriou, CardHub CEO, projects a first-ever breaking of the trillion-dollar mark on credit card debt if current trends remain unchanged.

“With the global economy in flux and debate raging over the timing of Federal Reserve rate hikes, data that speaks to the financial health of the average American household can be quite telling,” he said. “Credit card debt statistics, in particular, reflect consumer sentiment and can foretell overleveraging bubbles that may trigger constriction across lending markets.”

Papadimitriou blamed a still-shaky economy on this new debt bubble. “This first-quarter pay down covers just 38 percent of the $71 billion we added to our tab in 2015,” he continued. “With eight of the last 10 quarters reflecting year-over-year regression in consumer performance, evidence is mounting to support the notion that credit card users are reverting to pre-downturn bad habits.  Although the average indebted household’s balance dipped to $7,597 during the first quarter, this still represents a six percent increase relative to the first quarter of 2015. It’s also just $831 below the tipping point CardHub identified as being unsustainable. Despite credit card debt levels trending significantly upward, charge-off rates remain near historical lows. Something clearly has to give, and it does not seem to be our spending habits.”

Published
Jun 08, 2016
Planet Home Lending Reports Total Origination Volume Of $6.8B In Q2 2021

Planet Home Lending's total origination volume reached $6.8 billion in Q2 2021, up 77% from $3.9 billion in Q2 2020.

Industry News
Jul 22, 2021
FHFA Ends Controversial Refinance Fee

The FHFA announced that Fannie Mae and Freddie Mac will eliminate the Adverse Market Refinance Fee for loan deliveries, starting August 1, 2021.

Analysis and Data
Jul 19, 2021
Interfirst Mortgage Launches ONE, Backed By Non-Owner Occupied Properties

ONE is a unique product built on a single interest rate with no adjustments and qualifies off the cash flow of the rental property.

Industry News
Jul 16, 2021
Global Digital Lending Market Projected To Reach $27B By 2028

The Global Digital Lending Platform Market was valued at $7.14 billion in 2020 and is projected to reach $27.07 billion by 2028.

Analysis and Data
Jul 14, 2021
FOMC Discusses Raising Interest Rates

Inflationary pressures have finally forced the Federal Open Market Committee (FOMC) to discuss raising interest rates and tapering its bond-buying program.

Analysis and Data
Jul 14, 2021
Fathom Holdings Inc. Creates New Hispanic Division

Fathom Holdings Inc., a technology-driven real estate platform, announced the creation of their Hispanic Division to more adequately serve this fast-growing demographic. 

Industry News
Jul 07, 2021