Study: Americans racking up credit card debt faster this year

From clarionledger.com, 6/11/2013

Americans are on-pace to post more new credit card debt during 2013 than in the past four years, and are doing a worse job of managing their credit than a year ago. Those are some of the conclusions from a study released today by the credit card advisor CardHub.com.

In its study of credit card debt, called the Q1 2013 Credit Card Debt Study, Cardhub.com reported that “U.S. consumers are on pace to rack up nearly $47 billion (my emphasis) in new credit card debt this year.That would bring the total amount of credit card debt incurred from the beginning of 2011 through the end of 2013 to nearly $130 billion.”

Despite paying down nearly $32.5 billion in existing credit card debt during the first quarter of 2013 – a cycle that occurs each year as Americans get tax refunds and year-end bonuses and pay down holiday bills – this year’s paydown was the lowest in several years.

This is all distressing news, as families struggle to pay bills in the face of skyrocketing prices, chronic joblessness, and pay checks that fall further and further behind the rising cost of living.

It may, warns Cardhub.com CEO Odysseas Papadimitriou, force millions into default, and make consumers change their habits. It’s “something that must be addressed before debt levels rise to the point where consumers can no longer sustain them and we default in droves,” he notes. “That’s going to ultimately require a shift in perspective from the belief that living off credit is acceptable to an approach that emphasizes saving and responsible spending in the context of post-recession income levels. That won’t happen overnight, but there are steps that we can all take in the short term to rein in spending and improve our overall financial outlook.”

For the complete study, and some tips for managing your credit, visit http://www.cardhub.com/edu/q1-2013-credit-card-debt-study/.

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