The Consumer Financial Protection Bureau (“CFPB”) released its biennial report on the credit card market and compared its findings to those of the 2008 economic recession. With debt steadily rising each month, it is no surprise that the credit card market is beginning to crumble under the weight of delinquent payments and charged off debt.
The report highlighted several trends of our current credit card world:
- New credit card originations have increased by about 50% since 2010- there were around 110 million new credit card accounts opened in 2016. This is nearly a 50% increase than accounts opened in 2010. It is not as high as it was in 2007, but it is on its way.
- Total credit line, both used and unused, has increased- by mid-2017, consumers had more than $4 trillion in credit card line, used and unused combined. This figure continues to increase in every credit tier since the end of the recession. It is almost to the mid-2008 credit card line high of $4.4 trillion.
- Average credit card debt has increased by 9% over the last two years- cardholders with a subprime credit score have seen a 26% increase in their credit card debt.
Cardholders have few cards, but just as much debt- the average consumer holds four credit cards and as of mid-2017, at least 169 million have one credit card. The average number of cards held by consumers in the mid-2008 recession was five.
- Secured credit cards are rapidly growing in popularity- there was a 7% increase from 2015 to 2016 in new secured cards issued to consumers. This growth is driven largely by subprime consumers or those with no credit. 25% of these cards went to this sector of consumers. 7% of the 25% figure consists of consumers in the age range of 21 to 34.
The full report on this can be found here.
Credit card debt continues to rise and is steadily climbing to mid-2008 recession rates. Make smart financial decisions and recognize when you are in over your head with the credit card companies. The worst thing you can do is ignore it. Contact an experienced debt attorney at McCarthy Law to get more information about relief we can provide you with your debt issues.