Credit card debt soared in 2015 and may soon hit levels not seen since prior to the Great Recession.
American consumers are using their credit cards now more than at any point since the Great Recession struck in 2008. According to KOB 4 News, nationwide credit card debt may reach levels in 2016 that have not been seen since 2008. While there is debate around why debt levels are increasing so quickly, some analysts are raising alarms that the increased debt load could be a sign that consumers are becoming less careful with their spending habits. Other analysts worry that debt loads consumers are taking on could become unsustainable in the near future.
Rising credit card debt
Credit card research firm CardHub recently released its report on credit card debt in the United States. As CNBC notes, the report found that Americans added $71 billion in credit card debt in 2015, meaning that total credit card debt now stands at $917.7 billion. The $71 billion figure is 24 percent higher than it was in 2014. Perhaps even more worrying is that the majority of that debt - over $52 billion - was charged in the last quarter of 2015 alone.
It is also worth noting that credit card debt has now increased in eight quarters in the last two and a half years. Furthermore, the average credit card debt per consumer in 2014 was over $7,800, a figure that analysts say was already close to being unsustainable.
There is plenty of debate about why credit card debt is increasing. Some analysts argue that the increased spending is simply a sign that consumers now have increased confidence in the economy and in their ability to pay down their debts. They also note that for the time being most Americans are being fairly good about staying on top of credit card payments.
At the same time, however, as stated above, the per consumer debt levels are approaching worryingly high levels. Rather than an indication of a strengthening economy, some analysts worry that consumers are again taking on debt loads that they will not be able to pay off in the future, especially if the economy takes a turn for the worse or interest rates rise suddenly. The fact that credit card debt could soon exceed 2008 debt levels is particularly concerning.
What to do about credit card debt
Credit card debt, as the above figures show, is very common. Combined with other forms of debt, credit cards can leave one in a precarious and stressful financial situation. If one's debt loads are becoming unsustainable, it may be time to look into the possibility of declaring bankruptcy. Bankruptcy is not a decision to be taken lightly, but for some people it could help them start their financial life anew, including by wiping out some or all of their credit card debt. An experienced bankruptcy attorney can help anybody who is struggling with debt find out whether bankruptcy may be a suitable option for them.