During the first three months of 2018, Americans paid off more than $40.3 billion worth of credit-card debt according to WalletHub researchers. While this may sound like good news, Americans accumulated $91.6 billion in new debit on their credit cards just last year alone.
The amount of new credit-card debt accumulated by Americans during 2017 is the highest it’s been since 2007. Outstanding balances have only been as high as they currently are once before since 2008. Americans’ existing revolving debt currently stands at $1.021 trillion.
A spokesperson with the company Magnify Money notes that the amount of charge-card debt that Americans paid down during the first quarter of 2018 is far from impressive. He suggests that citizens’ credit-card debt has been increasing at such a high rate that the recent payoff barely makes a dent in it.
He also warns that it’s a pretty common trend to see more significant charge-card payments early on during a year than during the latter two quarters of it. He says that there’s a standard pattern whereby Americans increase their credit-card debt leading up to a holiday season then use bonuses to pay some of it off once the new year begins.
Another emerging trend is for Americans is to take out more widely available personal loans and to pay their charge cards off with them. In essence, they simply transfer their balance from one instrument to another without every really paying anything off.
Despite these trends, data compiled by TransUnion, the U.S. Census Bureau and the Federal Reserve does suggest that Americans are becoming better about paying off their debts. Fourth-quarter data from 2017 showed that the number of debts 30 days and older is trending downward.
The Federal Reserve recently held a meeting in which board members discussed the prospect of raising interest rates, though. This has the potential of increasing Americans’ debt.
Unemployment is currently at the lowest its been in 18 years, a factor that helped many Americans catch up with their debt. There are still many Ohioans, though, that are digging themselves out after many years of unemployment and delinquent accounts. Fortunately, there are many options Cincinnati attorneys can advise you of that can help you better manage your finances.