After an expensive holiday shopping season, Americans are expected to end 2016 with $80 billion more credit card debt than they started with, according to a recent study by WalletHub, a financial website.
The fact that U.S. consumers racked up a record-setting $21.9 billion in credit card debt during the third quarter of 2016, the study said, is serious cause for concern.
“It could mean that we haven't learned our lessons from the past,” said Lynette Baker, director of marketing at Consumer Credit Counseling Service of Rochester.
On top of skyrocketing credit card debt, WalletHub predicts that 2017 will be marked by modest economic growth and a stock market with little room to run.
Despite a generally bleak outlook, Baker said racking up credit card debt isn't inherently bad, so long as it is managed properly.
“Good things are happening. People are feeling more comfortable with the economy,” said Baker, “They start to use credit a little bit more often, and they are comfortable they are going to be able to pay it back.”
Americans now owe almost exactly as much as we did the quarter before the Great Recession officially began.
“If charge-off rates begin to rise, things could get ugly fast,” WalletHub mentions in its report, referring to instances when a company decides it has no chance to collect a debt and charges it off its books.
Since 1970, CCCS has helped hundreds of thousands of individuals and families deal with financial difficulties. Baker said that work will continue, since many people are taking measures to try and get their debt under control.
“As people start getting that job back, or getting a better job, or having some kind of better thing happen in their life, then they come in and deal with their credit card debt,” Baker said, “So we are seeing an increase in appointments this whole year.”
WalletHub's top three tips for managing debt, include making a budget (and sticking to it), building an emergency fund, and working to improve your credit standing.
