Remember How Americans Paid Off Billions In Credit Card Debt Last Year? Yup, We Blew It Already
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For a few months during the height of Covid and mandated shutdowns, the entire country was figuring out a way to pay off a huge chunk of debt.
U.S. consumers managed to pay off $56.5 billion in credit card debt in the first half of 2021. This followed a record-setting year for reducing credit card debt when Americans paid $82.1 billion in debt in 2020.
Well, we totally blew it, according to new findings from WalletHub.
After a record-setting year for credit card debt reduction in 2020, U.S. consumers are again adding new credit card debt by the billions, racking up $45.7 billion during Q2 2021.
During Q2 2021, consumers added $45.7 billion to their tab – an all-time record that nearly wiped out the first-quarter pay down.
Furthermore, WalletHub now projects that consumers will end the year with a net addition of $100 billion in credit card debt, which far exceeds the 10-year average of $45.6 billion.
As WalletHub points out, the rise in debt isn’t happening around the country. Some states have bigger payment problems than others.
The website compared all states based on how much residents owe to credit card companies and ranked the states with the biggest debt increase and the smallest debt increases in 2021.
States with the Biggest Debt Increase
- New York
States with the Smallest Debt Increase
- North Dakota
- South Dakota
Here are more key stats from the WalletHub study:
- Record Q2 Increase. Credit card debt increased by almost $45.7 billion during Q2 2021, an all-time record for the second quarter of the year.
- Bigger-Than-Normal Buildup. Consumers’ Q2 2021 credit card debt increase was 2.6X bigger than the post-Great Recession average for the second quarter.
To read more about the study, head over to WalletHub.
To find more information about getting out of debt, check out this article about paying off debt with “unexpected money” or how to pay off your mortgage in 5 years.