Credit Card Debt Hits 10-Year High: What That Means for You

A woman holds her credit card and hangs her head while sitting in front of a laptop
Photo by Twin Sails / Shutterstock.com

By two measures, Americans’ collective credit card debt has reached its highest level in a decade.

WalletHub reports in its recently released 2016 Credit Card Debt Study that:

  • In the fourth quarter of 2016, U.S. consumers’ outstanding credit card debt increased by a net of $60.4 billion — the largest fourth-quarter increase since 2007.
  • In 2016 as a whole, credit card debt increased by $89.2 billion — the largest increase for a year since 2007.

To put that another way, WalletHub notes that “we now owe almost exactly as much as we did right before the Great Recession officially began.”

So what do these statistics mean? WalletHub explains that credit card debt levels are reflective of Americans’ financial health and can foretell over-leveraging that could lead to constricted lending markets.

The financial data site continues:

“From that perspective, the fact that U.S. consumers racked up $60.4 billion in credit card debt during the fourth quarter of 2016 represents serious cause for concern. … 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.”

What high credit card debt means for you

What does that mean for you? That depends how much outstanding credit card debt you’re carrying.

While credit cards are not inherently bad, carrying credit card debt can endanger your financial health. And according to WalletHub, the average American household had $8,377 in outstanding credit card debt last year, a 6 percent increase from 2015.

As we report in “8 Foolproof Steps to Get You Out of Debt Fast,” the first step to eradicating debt is to stop using credit cards: “The more you swipe, the more the balance climbs.”

Of course, putting away your credit cards is easier said than done for anyone who is already in debt. That’s one reason why we’ve written that you need a budget and an emergency fund:

“… if you feel as if you can’t afford to let go because of financial constraints, start by setting up a spending plan and building an emergency fund to get you through those tough situations without having to resort to debt.”

For help with those steps, check out:

If you feel like you’re in over your head and do-it-yourself tips won’t cut it, visit the Money Talks News Solutions Center, where you can get help with credit card debt. We have partnered with Debt.com to match you with reputable experts who can help craft a plan to eliminate your debt.

What’s your take on Americans’ outstanding credit card debt reaching a 10-year high? Sound off below or on Facebook.

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