Is record credit card debt just one more sign that the country is heading for a recession? Remember consumer spending is 2/3 of economic growth. If the consumer decreases their spending it won't bode well for the economy. That is the consequence of to much credit card debt.
The personal-finance website WalletHub today released two key reports. Its latest Credit Card Debt Study found that consumers racked up $35.6 billion in credit card debt during Q2 2019 – an all-time record for the second quarter of the year.
Record Debt: U.S. consumers added $35.6 billion in new credit card debt during the second quarter of 2019 – the largest second-quarter build-up ever. WalletHub projects that consumers will end the year with a net increase of $70 billion in credit card debt.
High Interest Rates: 68% of Americans say the interest rates on their loans are too high.
What can you conclude from this report?
Consumers are not doing as good as advertised and maybe the economy isn't doing as good as Washington wants you to believe. What would be the reason for consumers to charge up credit cards and at the same time take on high interest rates most of which are 20% and above? Just the fact that consumers are willing to take on very high interest rates to secure credit is a worrisome sign.
Credit card debt should be going down and not up. At some point this becomes a very big issue if it hasn't already. We are at record highs as far as credit card debt goes!