It might seem like good news, but it’s not. While U.S. consumers paid down roughly $32.5 billion in outstanding credit card debt during the first quarter of 2014, that actually represents a decline from previous years and the continued deterioration of credit card habits as Great Recession lessons fade with time, according to CardHub’s 2014 Credit Card Debt Study .
Consumers historically pay off a lot of credit card debt during the first quarter of the year – with tax refunds, annual salary bonuses, and New Year’s Resolutions fueling their efforts. But last year’s first quarter pay down was 4% smaller than in 2012, and we ended the year having incurred 6% more debt overall. This year’s first quarter pay down was even smaller still, so CardHub projects that we will end 2014 with a $41.9 billion net increase in credit card debt – 8% more than last year and a 14% increase relative to 2012.
Other Key Stats:
- $6,628 – The average household’s credit card balance (down from $6,980 at the end of 2013)
- $298.5 Billion – CardHub projects that by the end of 2014, consumers will have defaulted on nearly $300 billion in credit card debt since 2009.
- 3.32% – The quarterly credit card default rate – down 0.3% from 2013 and 23% relative to early 2012 – seems to be stabilizing near historical lows. A significant reversal in this trend could lead to a credit crunch.
The complete 2014 Credit Card Debt Study – including 5 Tips for Managing Debt – can be found here: http://www.cardhub.com/edu/2014-credit-card-debt-study/