U.S. Consumers Rack Up $11.9 Billion in Overdue Credit Card Debt

After an increase of 11.5% in the fourth quarter of 2017, credit card debt is now up to $11.9 billion.

According to LendEDU, The improving economy hasn’t seemed to help U.S. consumers from posting the highest amount of overdue credit card debt in seven years. The level of debt for people who are behind on credit cards or who are lumped in a distressed category increased by 11.5 percent during the fourth quarter of 2017, up to $11.9 billion, Financial Times reported.

That’s Not the Only Troubling Figure

Mortgages appear to be giving U.S. consumers trouble as well as their credit card debt. The number of U.S. homeowners struggling with their mortgage payments increased by 5.2 percent during that quarter as well. The troubled or distressed mortgage holders held a collective $56.7 billion in debt.

But there is one silver lining – the amount of distressed industrial and commercial loans decreased by 8.5 percent during that quarter, down to $18.1 billion.

These numbers were recently released by the Federal Deposit Insurance Corporation. It underscores the concern some people are feeling that middle-class Americans are still suffering even as the economy improves. The credit card debt could be interpreted as a sign many Americans are using their credit cards to get by.

Credit cards are big business, but they aren’t the biggest piece of the pie for the banking sector. Credit cards comprise only 9 percent of the banking sector’s annual $17.4 trillion in business. But credit card debt made up 59 percent of all loans issuers considered uncollectable in that quarter.

Consumer Tips for Budgeting, Refinancing, and Paying Down Debt

Consumers who are struggling with their finances certainly aren’t alone, and they can improve their situation with hard work and some valuable tips.

First of all, everybody should take a hard look at their finances and come up with a budget that keeps them from spending more than they earn.

After the budget has been set, they should look at ways of either earning additional money or cutting back on expenses so they can send more money to their consumer debts, like credit cards or vehicle loans.

Knowing which loan to pay off first can set consumers up for success. They may want to tackle the payment with the highest interest rate, or they could opt for paying off the smallest balance first. They should use whichever method they find more motivating and easier to pursue. It’s especially important for borrowers to avoid taking on more credit card debt while they’re trying to pay off their other debts.

One way to handle out-of-control credit card payments may be to pursue refinancing. If consumers have home equity they can tap into, that might be a good way to go as long as they don’t overextend themselves and risk losing their home. Otherwise, they might consider applying for a personal loan if it has a lower interest rate than what their credit card carries.

Consumers can also try to work out a special payment plan with their credit card issuer, but they should be aware that it might have an impact on their credit scores.

Need Help?

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