Credit card debt could hit $1 trillion by the end of yearStaff writer ▼ | June 10, 2016
U.S. households will accumulate $1 trillion in outstanding debt by the end of 2016, the most ever, according to CardHub.
Spending Consumers only paid $26.8 billion in credit card debt
Over the first quarter of 2016, consumers only paid $26.8 billion in credit card debt, which is 38% of the $71 billion added during 2015. This is also the smallest first-quarter debt reduction since 2008 and is nearly 25% below the post-recession average, CardHub said in its report.
Things are going right for the economy, and wrong for the consumer, said Jill Gonzalez, an analyst with personal finance website and CardHub’s sister company WalletHub.
The increase in consumer confidence is leading to higher spending, she added. For the second quarter of 2016, the amount of debt paid by consumers could be $30 billion, Gonzalez said.
Consumer spending accounts for more than two-thirds of U.S. economic output, and economists say that credit-card spending in particular shows that people are feeling more confident about their job security and the economic recovery. ■