Average Credit Card Balance up 6% in December
A report from Equifax indicates a significant increase in credit card debt in America, with the average person racking up a 5.9% higher balance in 2014. In total, Americans accumulated $624.4 billion in credit card debt in 2014, up from $606.75 billion the previous year.
While consumers in the United States have been making progress over the years in paying off their debts and monthly balances, recent statistics indicate Americans may be reverting back to its old ways. Equifax reports more than 361 million outstanding credit card loans in the United States, up from 312 million in 2010.
But consumers seem to have a handle on these increased balances. The debt utilization, or the percentage of the total credit used, is still down 16% from its peak in early 2010.
Banks appear to be more willing to accept credit card applications now compared to right after the economic decline of 2008. Last quarter, lenders approved 16 million new accounts, compared to 9 million in the third quarter of 2009. This is partly due to a loosening of the rules with regards to credit scores. In the second quarter of 2010, only 13.5% of credit cards were for people with scores below 620. Last quarter, that number rose to 21.7%.
As long as Americans are able to pay off their balances in a timely manner, statistics like this could indicate growth for the American economy. If not though, we may soon see a repeat of 2008 that may take another six years of recovery.