Wednesday, December 13, 2017
WalletHub projects 2017 will end with more than $50 billion in new credit card debt. "This fifth rate hike in recent years coincides with record increases in credit card debt levels that put us on pace to cross $1 trillion in outstanding balances by the end of the year," said Diana Popa, WalletHub Communications Manager. "And it contributes to an unwelcome holiday present for consumers: an extra $7.4 billion in credit card interest charges in 2018."
WalletHub's main findings from the study follow:
For more details on the study, visit wallethub.com/edu/credit-card-debt-study/24400/
This may or may not mean trouble down the road. With a major tax overhaul with far-reaching impacts expected on every sector, no one can predict how credit card debt will affect the overall economy and payments in particular. But Discover.com pointed out that personal consumer spending is critical because it accounts for more than two-thirds of the U.S. gross domestic product.
"It's difficult for consumers to see debt as a good thing, as it means they have an obligation to pay someone out of their future earnings," the website states at www.discover.com/credit-cards/resources/how-does-credit-card-debt-affect-the-economy . "It can also mean incurring costly interest charges. But credit card debt can actually be a positive thing from the standpoint of the entire economy.
"When people make charges to their credit cards, they may be using them as a means to finance purchases that they couldn't otherwise afford. Because consumers are able to make these purchases, businesses are then generating revenue they might not have received, stimulating the economy."
The site further mentions recent Gallup survey findings that 76 percent of adults in the United States reported having at least one credit card, and 48 percent acknowledged carrying credit card debt. "When you consider how these tens of millions of credit card users are able to make purchases just because they have a credit card, it's easy to see how credit card debt can indicate healthy levels of economic activity," Discover added.
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