Can you gauge the state of the country's economy by how much credit card debt people have? The simple answer is maybe. For example, in the summer of 2008, this type of debt hit a high of approximately $866 billion around the time of the housing crisis that plunged the nation into a recession.
Credit card debt hit a low in 2013 but has steadily climbed since as the economy recovered, which was not unexpected. However, what wasn't expected was that 2018 would beat 2008. At the end of last year, credit card debt reached $870 billion. Perhaps more alarming is that more and more people are getting 90 days or more behind on their payments.
What about other debt?
Credit card debt isn't the only debt on the rise. By the end of 2018, total debt for all Americans was $13.54 trillion, and that number has not been that high since summer 2008. Credit cards only account for a fraction of this number considering the following amounts of debt held by consumers here in Wisconsin and across the country:
- Auto loans accounted for $1.27 trillion.
- Mortgages accounted for $9.12 trillion.
- Student loans accounted for $1.46 trillion.
While certain segments of the population have more of certain types of debt, the overall picture is that Americans are in just as much and more debt than they were during the last recession. What this could mean for the future is not yet clear, but it probably means that many people are having trouble managing their finances.
What to do about credit card debt
If you are among the millions of Americans who have a substantial amount of credit card debt, you could take steps to manage it, which could alleviate some of the financial stress you may feel:
- Adjust your view on finances.
- Pay on time.
- Pay more than the minimum, if possible.
- Work out a repayment plan.
If these steps sound simpler than they really are, you may be in more financial distress than you realized. If you feel overwhelmed by debt, you may need to explore your debt relief options. One of those options could involve filing for bankruptcy. Doing so could provide you with a fresh financial start that could give you the chance to do things differently.
Figuring out whether this would be the best option for you could involve scheduling a consultation with a bankruptcy attorney who can review your situation and provide you with the information you need in order to make that decision.