It’s no secret that many Americans have a problem with credit card debt. Credit card debt in our country soared after the financial crisis of 2008, when families suddenly found themselves strapped for cash. Families had little choice at that point but to turn to their credit cards to cover short term purchases, a move that put many deeply in debt. In fact, in 2008 American credit card debt peaked at $1 trillion, a figure roughly equal to Mexico’s entire gross domestic product.
A new report from the Federal Reserve states that although consumer credit card debt is falling, it still remains very high. In July 2013, the average indebted American household carried approximately $15,000 worth of credit card debt. An intimidating number by any standard, though the Federal Reserve acknowledges that the figure is skewed somewhat by a few extremely indebted families.
Still, the trend is slowly winding downward, as families get out from under the load of debt they have accumulated. But it hasn’t all been done by paying down debts. Though some people have been able to work their way out from under their load of debt, others have found the task simply impossible. In these cases, people declared personal bankruptcy, a process that enabled them to escape from the cycle of overwhelming debt.
The road ahead remains a difficult one for many families in Washington and across the country. The burden falls especially hard on those who have already taken on a mortgage or a student loan, two areas that also maintain stubbornly high amounts of debt. As the economic recovery continues, however, we can hope that more of America’s families will find their way out from under their persistent debt.
Source: Daily Finance, “Credit Card Debt: Falling, But Still Very High” Palash Ghosh, Aug. 21, 2013