Credit Card Debt Reaches $1 Trillion
For the first time since the 2008 recession, credit card debt in the United States reached $1 trillion, according to Federal Reserve data. This is an increase of 6.2% from last year but just 0.3% from January of this year.
Credit unions hold $52.3 billion of this debt (5.5% of the total debt), which is their largest share to date. Banks hold 84% of the debt on credit cards.
The Wall Street Journal reports this is good news for the economy, as it means more people are purchasing big-ticket items. The publication also said that “the big question” is how long “this bullish streak in consumer debt” can keep up. While unemployment is low, interest rates are on the rise, which could dampen consumer borrowing.
There are some other concerning signs. While most people are making their payments on time, delinquent credit card payments are on the rise. Also troubling is the fact that subprime auto loans and personal loan delinquencies are on the rise.
Student and auto loans have both already reached the $1 trillion mark.