Americans rack up trillion dollars in credit card debt

CNN : Americans racked up a record amount of credit card debt in 2023, soaring past a trillion dollars. But a mass retrenching in consumer spending — the main driver of the US economy — is unlikely this year, according to economists. Workers are still commanding robust wage gains, the stock market is on solid footing, attitudes toward the economy have improved dramatically in recent months, and consumers spent at a healthy clip during the holidays.
Card debt has indeed surged in nominal terms, but after adjusting for inflation, it’s nearly 20 percent below a peak it reached in late 2008, according to a WalletHub analysis of New York Fed data. Americans also seem equipped to deal with their balances, economists say.

“Consumers still have a lot of money left over to be able to spend, so the credit card data is often misinterpreted,” Russell Price, chief economist at Ameriprise Financial, told CNN. “The dollar value of credit-card debt is at an all-time high, but so is population, employment and consumer income.” Credit card debt hit a fresh nominal high of US$ 1.13 trillion from October through December, according to the Federal Reserve Bank of New York. The issue with those figures is that they don’t factor in that about 55 percent of borrowers repay their balances in full each month, Price said. New York Fed staff noted that limitation of the data in a blog post.