Answer (from Federal Reserve analysis reported in WSJ): After restating earlier figures, the level of credit card debt hit $1 Trillion in December of 2016, a level it last seen prior to the recession.
Here is a chart showing how credit card balances (a.k.a. revolving consumer credit) has varied over the past decade:
Fun facts from a CBS article:
- Credit cards are the third consumer asset class to cross the $1 trillion threshold with auto loans and student loans already in excess of that dollar amount.
- Delinquencies on credit card debt (a measure of nonpayment): 2.3% today vs. peak of 6.8% in 2009
- Average interest rate: 13.9% on existing cards
- Annual Interest being paid by those with credit card balances = $139 billion ($1 trillion X 13.9%). Wowsa!
- Might be interesting to ask students to research what $139 billion would buy
- Annual interest being paid by those who pay their credit card balances every month = $0
Interested in credit card activities? Let your students analyze a few student profiles and complete this NGPF Activity: “Analyze: Should They Open A Credit Card?“