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2015 Credit Card Debt Study: Trends & Insights

Credit Card Debt
With the global economy showing signs of extreme volatility and debate raging over both the timing and frequency of Federal Reserve rate hikes, data that speaks to the financial health of the average American household can be quite telling. Credit card debt statistics, in particular, reflect consumer sentiment and can foretell overleveraging bubbles that may trigger constriction in credit markets.

While 2015 started with promise, as consumers repaid nearly $35 billion in credit card debt during the first quarter of the year, data from the second and third quarters do not inspire confidence. We erased almost all of our first-quarter paydown during Q2, racking up a whopping $32 billion in new balances, and then followed that up by adding $21.3 billion to our tab during Q3 – the largest second and third quarter binges since CardHub began conducting this study in 2009.

As a result, CardHub now projects that we will end 2015 with a net increase of $68.5 billion in credit card debt – putting us perilously close to a tipping point at which balances become unsustainable and delinquency rates skyrocket.

Q3 2015 Main Findings

By the Numbers:

  • Change in Outstanding Credit Card Debt: $15,281,620,200
  • Credit Card Charge-Offs: $6,016,276,903
  • Net Result in Debt Load: $21,297,897,103
    • Relative to Q3 2014: 34%
    • Relative to Q3 2013: 76%
    • Relative to Q3 2012: 68%
    • Relative to Q3 2011: 32%
    • Relative to Q3 2010: 284%
    • Relative to Q3 2009: 77%

  • While the fact that we incurred less new credit card debt in the third quarter of 2015 than in the second might lead some to believe that credit responsibility is improving, this mirrors a historical trend where a first-quarter paydown is followed by a spike in debt levels during the second quarter, a more-modest increase during the third quarter, and a relatively massive buildup to end the year.
  • The $21.3 billion in new credit card debt that we added to our tab in Q3 2015 is the largest third-quarter buildup since the Great Recession – 71% higher than the post-recession average.
  • With 8 of the past 10 quarters reflecting year-over-year regression in consumer performance, evidence is mounting to support the notion that credit card users are reverting to pre-downturn bad habits.
  • We expect outstanding credit card debt to surpass $900 billion by the end of the year, bringing the average indebted household’s balance above $8,000 – the highest amount since the Great Recession and roughly $400 below the tipping point CardHub identified as being unsustainable.
  • While credit card debt levels are trending significantly upward, charge-off rates remain near historical lows and are, in fact, down on a year-over-year basis. Something clearly has to give, and it does not seem to be our spending habits.

 

Data & Graphs

Please note that figures listed in the Main Findings section of a particular quarter won’t always match those in the Data & Graphs section of this report, as the Federal Reserve regularly updates historical data with new research. Figures included in each Main Findings section reflect the information that was available at the time of that quarterly study being conducted, while the Data & Graphs section reflects the most recent data available.

Net Result of Consumer Credit Card Debt Q1 2009 – Q3 2015

Net Result in Debt Load Relative to Same Period
Last Year
Relative to Same Period Two Years Ago
2015 Q3 $21,297,897,103 34% 76%
2015 Q2 $32,020,282,257 14% 86%
2015 Q1 -$34,769,624,295 7% 7%
2014 $57,429,955,493 43% 58%
2014 Q4 $45,934,983,817 6% 14%
2014 Q3 $15,888,180,012 31% 25%
2014 Q2 $28,143,312,464 64% 59%
2014 Q1 -$32,536,520,800 0.4% -5%
2013 $40,126,407,973 10% -14%
2013 Q4 $43,242,227,749 7% -1%
2013 Q3 $12,087,752,777 -5% -25%
2013 Q2 $17,205,458,114 -3% -11%
2013 Q1 -$32,409,030,667 -5% 0.8%
2012 $36,451,406,956 -22% 1,401%
2012 Q4 $40,324,722,087 -8% 57%
2012 Q3 $12,689,320,555 -21% 129%
2012 Q2 $17,701,582,851 -8% 84%
2012 Q1 -$34,264,218,536 5% -11%
2011 $46,632,170,869 1,820% 5,427%
2011 Q4 $43,860,321,843 70% 95%
2011 Q3 $16,154,372,027 191% 35%
2011 Q2 $19,279,517,221 101% 104%
2011 Q1 -$32,662,040,223 -15% -27%
2010 $2,428,566,422 377%
2010 Q4 $25,746,466,555 14%
2010 Q3 $5,549,815,531 -54%
2010 Q2 $9,611,062,255 2%
2010 Q1 -$38,478,777,918 -14%
2009 -$875,371,613
2009 Q4 $22,498,812,887
2009 Q3 $12,005,705,700
2009 Q2 $9,449,012,767
2009 Q1 -$44,828,902,967

Net Result in Debt LoadGreen indicates that consumers decreased their debt relative to the previous quarter. Red indicates they increased their debt relative to the previous quarter.

Relative to Same PeriodGreen indicates that consumers either paid down more debt or accumulated less debt than they did in the previous two years. Red indicates that they either paid down less debt or accumulated more debt than they did in the same quarter in the previous two years.

Annual Net Result of Consumer Credit Card Debt 2009 – 2015(p):

Annual Debt Load Increase/Decrease

 

Consumer Credit Card Debt and Charge-off Data (in Billions):

Total Outstanding Credit Card Debt Change in Outstanding Credit Card Debt Quarterly Credit Card Charge-Off in Dollars Net Result in Debt Load
2015 Q3 $871.9 $15.3 $6 $21.3
2015 Q2 $856.6 $25.5 $6.5 $32.0
2015 Q1 $831.1 -$41.1 $6.3 -$34.8
2014 $872.2 $26.3  
2014 Q4 $872.2 $39.5 $6.5 $45.9
2014 Q3 $832.7 $9.8 $6 $15.9
2014 Q2 $822.9 $21.1 $7.1 $28.1
2014 Q1 $801.8 -$39.2 $6.7 -$32.5
2013 $841 $28.1  
2013 Q4 $841 $36.2 $7 $43.2
2013 Q3 $804.8 $5.7 $6.4 $12.1
2013 Q2 $799.1 $10.0 $7.2 $17.2
2013 Q1 $789.1 -$39.9 $7.5 -$32.4
2012 $829 $31.9  
2012 Q4 $829 $32.5 $7.8 $40.3
2012 Q3 $796.5 $5.2 $7.4 $12.7
2012 Q2 $791.3 $9.5 $8.2 $17.7
2012 Q1 $781.8 -$42.6 $8.4 -$34.3
2011 $824.4 $44.9  
2011 Q4 $824.4 $34.5 $9.3 $43.9
2011 Q3 $789.9 $5.0 $11.1 $16.2
2011 Q2 $784.9 $8.4 $10.9 $19.3
2011 Q1 $776.5 -$46.2 $13.5 -$32.7
2010 $822.7 $77.8  
2010 Q4 $822.7 $9.9 $15.8 $25.7
2010 Q3 $812.8 -$11.8 $17.4 $5.5
2010 Q2 $824.6 -$13.0 $22.6 $9.6
2010 Q1 $837.6 -$60.5 $22 -$38.5
2009 $898.1 $85.3  
2009 Q4 $898.1 -$0.3 $22.9 $22.5
2009 Q3 $898.4 -$10.7 $22.7 $12.0
2009 Q2 $909.1 -$12.8 $22.2 $9.4
2009 Q1 $921.9 -$62.4 $17.6 -$44.8
2008 Q4 $984.3 N/A N/A N/A

Quarterly Credit Card Charge-Off in Dollars

Average Credit Card Debt per Household

Tips for Managing Debt

 

  1. Make a Budget (and Stick to It): It’s difficult to spend within reason or plan savings without knowing how your monthly spending compares to your take-home as well as what it is allotted to. That is why you should rank order your expenses – including debt payments, emergency fund contributions, and other savings – and trim the fat if necessary. And most importantly, once you develop your budget, make sure to stick to it or else you’ll have simply wasted your time.
  2. Build an Emergency Fund: With a robust financial safety net, you’ll be less at the mercy of the economy and able to withstand a prolonged period of joblessness, should the need arise. Your goal should be to gradually save about a year’s worth of after-tax income through monthly contributions to an emergency account.
  3. Improve Your Credit: This might sound a bit counterintuitive, considering that increased access to credit provides more opportunity to incur debt, but improving your credit standing will have a dramatic impact on the cost of your debt and, thus, how quickly you can pay it off. Better credit can also make it easier to find a job or a place to live – both of which impact your bottom line.

    You can determine your starting point and get personalized advice by signing up for our sister-site WalletHub’s Financial Fitness Tool, which provides free credit reports, scores and monitoring.

  4. Try the Island Approach: The Island Approach is a credit card strategy that involves using different cards for different types of transactions, as if they are a chain of distinct yet interrelated islands. For example, you could transfer your existing debt to a 0% credit card in order to reduce your monthly payments as well as get out of debt sooner and subsidize your ongoing spending with a rewards card or two that offer high earning rates in your biggest expense categories. This will enable you to get the best possible collection of terms as well as gain a better perspective on your spending and payment habits since finance charges on your everyday spending cards will signal a need to cut back.
  5. Use the Snowball Method to Strategically Pay Off Amounts Owed: In order to become debt free at the least possible cost, you should attribute the majority of your monthly debt payment to the balance with the highest interest rate while making the minimum payment required on the rest. Once your most expensive debt is paid off, repeat the process as necessary with the remaining balances.
  6. Evaluate Your Job Situation: In some cases, all the budgeting and planning in the world won’t be enough to solve your debt problems. You may therefore need to evaluate whether there are higher-paying opportunities out there for people with your background or if you’ll need to acquire some new skills in order to make yourself more marketable. This might require making a bit of an investment in yourself, but as long as you get a worthwhile return it’s money well spent.

Raw Data

 

Net Result in Debt Load Relative to Same PeriodLast Year Relative to Same Period Two Years Ago Relative to Same Period Three Years Ago Relative to Same Period Four Years Ago Relative to Same Period Five Years Ago Relative to Same Period Six Years Ago
2015 Q3 $21,297,897,103 34% 76% 68% 32% 284% 77%
2015 Q2 $32,020,282,257 14% 86% 81% 66% 233% 239%
2015 Q1 -$34,769,624,295 7% 7% 1% 6% -10% -22%
2014 $57,429,955,493 43% 58% 23% 2,265% -6,661% N/A
2014 Q4 $45,934,983,817 6% 14% 5% 78% 104% N/A
2014 Q3 $15,888,180,012 31% 25% -2% 186% 32% N/A
2014 Q2 $28,143,312,464 64% 59% 46% 193% 198% N/A
2014 Q1 -$32,536,520,800 0.4% -5% -0.4% -15% -27% N/A
2013 $40,126,407,973 10% -14% 1,552% -4,684% N/A N/A
2013 Q4 $43,242,227,749 7% -1% 68% 92% N/A N/A
2013 Q3 $12,087,752,777 -5% -25% 118% 1% N/A N/A
2013 Q2 $17,205,458,114 -3% -11% 79% 82% N/A N/A
2013 Q1 -$32,409,030,667 -5% 0.8% -16% -28% N/A N/A
2012 $36,451,406,956 -22% 1,401% 4,064% N/A N/A N/A
2012 Q4 $40,324,722,087 -8% 57% 79% N/A N/A N/A
2012 Q3 $12,689,320,555 -21% 129% 6% N/A N/A N/A
2012 Q2 $17,701,582,851 -8% 84% 87% N/A N/A N/A
2012 Q1 -$34,264,218,536 5% -11% -24% N/A N/A N/A
2011 $46,632,170,869 1,820% 5,427% N/A N/A N/A N/A
2011 Q4 $43,860,321,843 70% 95% N/A N/A N/A N/A
2011 Q3 $16,154,372,027 191% 35% N/A N/A N/A N/A
2011 Q2 $19,279,517,221 101% 104% N/A N/A N/A N/A
2011 Q1 -$32,662,040,223 -15% -27% N/A N/A N/A N/A
2010 $2,428,566,422 377% N/A N/A N/A N/A N/A
2010 Q4 $25,746,466,555 14% N/A N/A N/A N/A N/A
2010 Q3 $5,549,815,531 -54% N/A N/A N/A N/A N/A
2010 Q2 $9,611,062,255 2% N/A N/A N/A N/A N/A
2010 Q1 -$38,478,777,918 -14% N/A N/A N/A N/A N/A
2009 -$875,371,613 N/A N/A N/A N/A N/A N/A
2009 Q4 $22,498,812,887 N/A N/A N/A N/A N/A N/A
2009 Q3 $12,005,705,700 N/A N/A N/A N/A N/A N/A
2009 Q2 $9,449,012,767 N/A N/A N/A N/A N/A N/A
2009 Q1 -$44,828,902,967 N/A N/A N/A N/A N/A N/A

* Some of the numbers may differ from study to study as a result of the Federal Reserve updating certain numbers for several months after first publishing them. For questions or more information regarding this study, please contact our media department.

Editorial Disclaimer: Editorial content is not provided or commissioned by financial institutions. Opinions expressed here are the author’s alone and have not been approved or otherwise endorsed by any financial institution, including those that are CardHub advertising partners. Our content is intended for general educational purposes and should not be relied upon as the sole basis for managing your finances. Furthermore, the materials on this website do not constitute legal advice and should not be relied upon as such. Please let us know if you have any questions or suggestions.

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