Credit Card Debt Crisis: A 13 Trillion dollar problem

The #creditcard #debtcrisis continues to thicken like old pea soup and it’s starting to stink.

Total outstanding revolving debt (with 70% of that being made up of credit card debt) has been perpetually growing since it flattened in 2013.

The average US household credit card debt $16,000 (it was closer to $15,000 in December 2017 up +6.67% in 4.5 months).

It’s important for Americans to know that as they take on more debt, interests will continue to climb thus making the debt more and more expensive. The average interest rate per household is $18.76% costing Americans, on average, more than $1,200 per year in interest payments. Once again, the Fed is expected to raise the interest rate by 0.25%.

With people living paycheck-to-paycheck, everything is about personal cashflow and the the slightest adjustments can have massive impacts.

Rollover credit card debt really only modifies into a major concern when the payments and interest becomes unaffordable for the individual (many financial experts recommend having point based credit cards to establish and grow credit as long as you can a) stay disciplined to live within your financial means and 2) REALLY stay disciplined to live within your financial means).

“With credit card debt currently at record levels, it’s frightening that so many Americans do not have a plan to get out of the red,” said senior industry analyst Matt Schulz. “Simply put, there’s only so much credit card debt Americans can absorb without it causing real problems.” Read the rest of the USA Article here

But as data from major companies like Capital One and Discover can attest, charge-off rates continue to rise because payments and interest rates are becoming more and more unaffordable.

The American Bankers Association illustrated that outstanding credit card balance has been increasing consistently since 2015 with its biggest jump in 2017.

The ABA found that the average size of the subprime marker was growing faster than ever before.

So what does this mean to you?

Well it doesn’t occur in a vacuum. An increase in the subprime market, will have major drags on the auto sales market, mortgage rates / payment issues, and credit lending. All of these could influence a recession which some predict is on its way.

At the end of the day, the debt crisis can’t be taken lightly.

Follow me online on Twitter @donmarkland or Instagram donmarkland

Don Markland is the Chief Revenue Officer for Tax Defense Network, a private equity company in Jacksonville, FL where he leads the nation’s largest tax resolution and full service financial services company in the U.S. From student loans to business entities to bookkeeping to even entrepreneur starter packs, TDN works with every consumer and business leader across the country helping them change the way they look at their finances everyday.

Prior to TDN, Don spent time as a Global VP leading the Amazon account in Jamaica. He has also lead $100M operations for State Farm Insurance, All State, Geico, and CenturyLink. Don spent time in the start up world as Chief Operating Officer for Launch Leads, a marketing start up in Salt Lake City, Utah where he was named to Utah Business Magazine’s Top 40 under 40 for leading businesses executives in the entire state. Prior to Launch Leads, Don spent time in the BPO space building call centers in the Philippines, India, El Salvador, and domestic US.

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