Tags: credit | card | debt | trillion | economy | consumers

WalletHub: Outstanding Credit-Card Debt Nearing $1 Trillion

WalletHub: Outstanding Credit-Card Debt Nearing $1 Trillion
(Eduardo Huelin/Dreamstime)

By    |   Monday, 11 September 2017 09:07 AM

Outstanding credit-card debt soared in the second quarter and is now at the second-highest point since the end of 2008, nearing $1 trillion.

Following the worst year for credit-card debt since the Great Recession, the U.S. started 2017 with a $30.5 billion first-quarter paydown. But American consumers borrowed it back and then some during the second-quarter, racking up $33 billion in new debt, WalletHub reported.

Consumer credit and debt reports are closely watched for clues about the direction of consumer spending, which accounts for about 70 percent of economic activity.

“So it’s 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,” WalletHub explained.

WalletHub projects that we will end 2017 with more than $60 billion in new credit-card debt. “That would mean we’d owe well over $1 trillion in credit card debt overall,” WalletHub projected.

The $33 billion in credit-card debt that Americans added in the second quarter is 45 percent higher than the post-Great Recession average.

American consumers ended 2016 with $87.2 billion in new credit-card debt, most for a year since 2007 and 130 percent above the post-recession average.

“Since the end of the Great Recession, consumer performance has regressed on a year-over-year basis in two out of every three quarters,” WalletHub explained.

“The fact that charge-off rates remain near historical lows continues to fuel lenders’ appetites for extending credit, but there will be a tipping point eventually.”

To be sure, Newsmax Finance Insider Lance Roberts recently warned that savvy investors should be very afraid of surging consumer debt.

"With interest rates already at historic lows, the consumer already heavily leveraged and wage growth stagnant, the capability to increase consumption to foster higher rates of economic growth is limited," he explained to Newsmax Finance.

"Debt acts as a 'cancer' on an individual’s wealth as it siphons potential savings from income to service the debt. Rising levels of debt, means rising levels of debt service that reduces actual disposable personal incomes that could be saved or reinvested back into the economy," Roberts said.

"The mirage of consumer wealth has been a function of surging debt levels. 'Wealth' is not borrowed, but 'saved,' and this is a lesson that too few individuals have learned."

Roberts isn't alone in his warning.

Fellow Newsmax Finance Insider Peter Reagan not only also warned investors, but offered sage advice on how to survive the debt-bubble implosion.

"Household debt is rising at an alarming rate, along with credit delinquency in several sectors, and the Fed just issued a sobering warning in response," he wrote for Newsmax Finance.

"When this debt bubble pops, it could shake markets and touch every American’s pocket book."

"There is one asset that can offer both protection and opportunity for growth when this bubble eventually pops: physical precious metals," he wrote.

(Newsmax wires services contributed to this report).

© 2021 Newsmax Finance. All rights reserved.

1Like our page
Outstanding credit-card debt soared in the second quarter and is now at the second-highest point since the end of 2008, nearing $1 trillion.
credit, card, debt, trillion, economy, consumers
Monday, 11 September 2017 09:07 AM
Newsmax Media, Inc.
Newsmax TV Live

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved