A sure sign that people are less concerned about the economy: They took out their credit cards again in 2013. Outstanding credit card increased $38.2 billion in 2013, according to CardHub’s 2013 Credit Card Debt Study released Monday.
That’s 8 percent more than the previous year. CardHub projects a $41.2 billion increase this year.
“One could easily come to the conclusion that 2013 was a healthy year for consumer spending given the fact that outstanding credit card debt increased only $10.4 billion while defaults fell 16.7 percnet,” says CardHub CEO Odysseas Papadimitriou. “But that would fail to take into account the $27.7 billion that we defaulted on, yet still owe. As has been the case in recent years, the first quarter of 2013 was the only one in which we paid down debt.”
>> $42 Billion: The amount of credit card debt that U.S. consumers accumulated in Q4 2013 alone. This represents a 5 percent increase relative to Q4 2012.
>> $6,971:The average household’s credit card balance.
>> $267 Billion: The amount of credit card debt that consumers have defaulted on in the past five years – a boon for collection agencies, to say the least.
>> 16.7 percent: The credit card default rate declined 16.7 percent in 2013 and is now approaching historical lows. A reversal in this trend could lead to a significant credit crunch.