CardHub: Outstanding Credit Card Debt Could Hit $1T in 2016

Outstanding credit card balances could reach $1 trillion by the end of 2016, according to a CardHub study released last week. The prediction comes after U.S. households paid down just $26.8 billion in credit card debt in the first quarter — the smallest first quarter debt reduction since 2008, at nearly 25 percent below the post-recession average paydown. The paydown covers only 38 percent of the $71 billion that was added to the household debt balance in 2015.

Overall, consumer performance has regressed over the last two years — in 8 out of the last 10 quarters, consumers increased their debt relative to the preceding quarter, which could suggest a shift back to pre-recession bad habits, CardHub said. The current average household debt balance stands at $7,597, a 6 percent increase from a year prior, while charge-offs remained near historic lows.


About Author

Monica C. Meinert

Monica C. Meinert is deputy editor of the ABA Banking Journal and editorial director at the American Bankers Association, where she oversees ABA Daily Newsbytes.