Smart Borrower Blog

American Credit Card Debt Tops New High


Jan 10th, 2018 @ 2:57 PM by Amber Nelson


U.S. consumers pushed their credit card debt to a new record high in November, according to a survey from the Federal Reserve , and yet credit card delinquency rates remain near historic lows.

The Fed reported that outstanding revolving debt – made up mostly by credit card borrowing – rose to $1.023 trillion in November, up $11.2 billion from the month before. That is an all-time high, even above the previous high marked right before the Great Recession hit in 2008.

“It was a really big increase,” Matt Schulz, senior industry analyst for Creditcards.com. “And it shows people clearly weren’t shy about using their credit cards during the holidays.”

While credit card debt continues to climb, overall consumers seem to be managing it well. The American Bankers Association reported Tuesday that the delinquency rate on bank-issued credit cards fell to 2.62% in the 2017 third quarter from 2.67% in the second. It remains well below the 15-year historical average of 3.62%.

“Consumers continue to take a disciplined approach to managing their credit cards, which has kept delinquencies in this category near historical lows for more than five years,” said ABA Chief Economist James Chessen.

Chessen and other analysts attribute the low delinquencies to a brighter economic outlook.

“We expect tax reform will improve the economy by creating more job opportunities and augmenting wage growth,” Chessen said. “That extra boost, combined with consumers’ continued financial discipline, should help keep delinquencies low in the near future.”

There has, however, been a rise in delinquencies among low-income, bad-credit borrowers. Schulz said that banks have taken not of this fact and will probably have stricter credit card standards for borrowers in 2018.

The Fed also showed that nonrevolving credit – things like student loans and car loans – rose $16.7 billion to $2.804 trillion from October to November. Total American debt, including revolving and nonrevolving credit is now at $3.827 billion.

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.

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