US Credit Card Debt Reaches Record-High $870 Billion in 2018

US credit card debt approached $870 billion as of December 31, a new historic high, Federal Reserve data show. The report also shows credit card balances of Americans increased by $26 billion from the preceding quarter.

The report also said that the rise in credit card balances is consistent with seasonal patterns. However, the figure showed it is the first time that credit card balances reached the nominal peak recorded in 2008.

Overall, credit card debt surged for the 24th consecutive quarter, with a 1.5% rise in the fourth quarter last year.

At present, nearly 480 million credit cards are in circulation — an increase of more than 100 million from the time it hit the bottom level after the recession ten years ago.

Analysts say the growing debt pile is expected to become a significant concern to fiscal hawks who will be concerned mainly by the fact that the figure continues to surge despite an impressive stock market performance and US economic growth.

According to experts, this historic debt bubble has currently exceeded a psychological level that prompts concern. This level is the 2008 peak of debt around the time the stock market crashed and the start of the Great Recession. However, many economists are not concerned with the figure since consumer debt is lower relative to GDP than it was in 2008.

The data also showed that older Americans are holding a significant share of credit card debt, as people aged 60 and above comprise about 30% of the total.

Experts attribute multiple factors for the record credit card debt, including a lack of wage growth and impulse buying in the social media age.