Credit Card Debt Reached Record High

We’ve started spending money again--that is, money we don’t necessarily have.

Americans racked up $48 billion in credit card debt last year, according to a new study by CardHub.com, a website that compares credit cards. That’s 424 percent more than the debt that was incurred in 2010 and 577 percent more than in 2009, according to Card Hub.

Most of the spending took place in the last three months of 2011, which mirrors what happened in 2009 and 2010. The culprit: holiday shopping.

Increased advertising by credit card companies drove a lot of this spending. Mintel Comperemedia--a firm that researches advertising data--reported that Americans received 447 million credit card offers in the mail in November last year versus 346 million in 2010, as reported in The Wall Street Journal.

We'll likely see credit card spending drop off when the data rolls in for the first three months of 2012. New Year resolutions, holiday bonuses and tax refunds typically allow Americans to pay down debt at the beginning of the year, according to The Christian Science Monitor. But lately first-quarter pay downs have not kept pace, according to CardHub.com.

Worried about credit card spending? Bankrate.com has tips: If you're running up a balance, make sure you pay on time. Next, be sure to know your credit score. Finally, if the balance on your card is growing, leave the card at home--and if possible, pay in cash.

Comments

[onecutie4meCP]

10:09 AM on 04/18/2012

contact www.clearpointccs.org to lower your monthly APR's and monthly payments and to pay back all of your debts throught a debt management plan!

[Nightangle]

02:25 PM on 03/10/2012

People are going about the same habits that put them in the hole . . . over and over again. Then they will blame everyone and anyone except themselves.

Of course, they will join OWS and shift the blame to those of who made good choices.

[babby201]

08:31 AM on 03/10/2012

you can only keep a woman out of a shoe store so long, then its like binge drinking.

[Mailman]

11:54 PM on 03/09/2012

I glad I don't have any.

[David A Gilbert]

05:09 PM on 03/09/2012

Well there you go. The economy is saved, Americans are back to normal...

[Jay Gould]

04:49 PM on 03/09/2012

Card Hub adds to the newly accumulated credit card debt the amount Americans had defaulted on and I don't see why they should do that. The Federal Reserve's G.19 report (http://www.federalreserve.gov/Releases/g19/) is a better data source and it shows that the increase in consumer debt has totally bypassed credit cards. And it's not because Americans have not been using their credit cards. On the contrary, we know from other reports that credit card use is now growing faster than debit for a first time in years. The biggest factor that keeps credit card debt down is the rising monthly payment rate (MPR), which measures the ratio of outstanding credit card debt paid back by Americans at the end of each month. According to Moody's, the MPR in January was 22.08%, the highest ever. For perspective, the historical averages have hovered in the mid-teens. So if Americans had maintained their pre-crisis repayment habits, the credit card debt total would have been rising in step with the non-revolving one, if not faster. For a closer analysis: http://blog.unibulmerchantservices.com/why-americans-slash-credit-card-debt-even-as-overall-indebtedness-rises.

[spytheweb]

12:45 PM on 03/09/2012

The last time i used a creditcard was June 2001. I use a debit card for online buys and pay everything else in cash. I will never use a credit card again, ever.

[mheister]

11:02 AM on 03/09/2012

Don't look at me. I'm not using the evil plastic being issued by the evil banks.

[james4truth1066]

10:54 AM on 03/09/2012

I was wondering about the credit issue again, because in the past six months I have gotten a MINIMUM of two credit cards offers everyday. I quickly toss mine in the trash bin, I just wish the rest of America would do that, because we are quickly sliding back down the debt slope again, and where did that get us three years ago?

[SaveRMiddle]

10:44 AM on 03/09/2012

Paying interest on anything means you're making someone else rich. We so badly need to stop doing this. We work too hard for too little already. Set a good example for your kids then discuss this! Make their lives better.

[Trustfunded1]

10:42 AM on 03/09/2012

Wait until people start noticing how the government is pushing student loan debt in an attempt to keep a debt based monetary system alive.

Debt slavery and lower wages are these peoples long term future.

[Candw1]

10:41 AM on 03/09/2012

Fools never learn.

[gjwarnock]

10:31 AM on 03/09/2012

But,,, but, the Joneses have a new one,,, I gotta have mine!!

[Sgt Price]

10:26 AM on 03/09/2012

Living above your means is the same regardless of the form of debt. Until someone can say they own their home, car, and everything else they have and do not have ANY DEBT, ridiculing those with credit card debt is just hypocritical because a person in either scenario is likely to be weighed down in debt their entire lives since they want to live as something that they're not.

[mheister]

11:05 AM on 03/09/2012

I somewhat agree. It's kinda tough tho to save up for a home or a car. If those are your only two notes, and you bought smart so you're not underwater and you don't have more car than you need (like a huge SUV, which most people seriously do NOT need), then hold your head high.

[MisterLogical]

10:23 AM on 03/09/2012

Ahhhh debt...the middle class ball and chain. This all goes back to the republican talking point of the "haves and soon-to-haves". It's not reality, everyone spends money they don't have because they believe Mitt Romney when he says you could be just like him if you work hard..WRONG! You can't be mitt Romney, mitt Romney is a multi millionaire because he was raised a multi millionaire attended all the best schools and was sheltered from the problems ordinary people face. This notion that everyone could be rich is a republican fallacy to get people to vote against their interests and it makes people think they could rack up debt because one day they'll be able to pay it back.