The personal finance website NerdWallet.com recently featured a very informative report on American Household Credit Debt Statistics.
Ultimately, the report indicated that average credit card debt for American families peaked in January 2009 — at the height of the economic crisis — and then did something peculiar: it dropped.
By the middle of 2010, average credit card debt dipped lower than it had been in years, but it wasn’t because Americans had paid off their credit card debt, NerdWallet.com explained.
Instead, credit card companies began to write off serious delinquent debts in earnest, which resulted in less credit card debt overall.
Then, in 2011, average debt leveled out, largely because credit card companies became more selective in approving credit. Instead of offering everyone a credit card, they tightened their standards and began to only approve consumers who they felt confident would pay them back.
However, as the economy slowly but steadily improves, NerdWallet.com believes that credit card companies will once again begin loosening their lending standards, thereby increasing the total amount of revolving debt.
In other words, NerdWallet.com suspects that the average credit card debt for American households will increase in coming years. For example, NerdWallet.com shared data showing that average household credit card debt increased by 2.36 percent from August 2013 to August 2014.
As credit card companies begin to offer credit to consumers more liberally, more Americans are going to find themselves in over their heads with debt they can’t afford to pay back.
When this happens, consumers can benefit from speaking with an experienced bankruptcy attorney who can help guide them back to financial safety.
Of course, consumers should take steps to help prevent this from happening whenever possible. Our next post will discuss several tips for avoiding credit card debt in the first place.
Source: nerdwallet.com, “American Household Credit Card Debt Statistics: 2014,” Tim Chen, Nov. 2014