Here’s a heart-stopper: The most recent fiscal quarter now officially shows credit card debt in the United States has hit $1 trillion. That’s a one, with 12 big goose eggs behind it.
This sinking monetary milestone isn’t terribly surprising to many of us, though, since cost of living has sky-rocketed. According to Bankrate Analyst Ted Rossman: “We would expect credit card balances to grow over time. Increased consumer spending, which powers a lot of economic growth, more card usage because cash is less and less of a thing, with each passing year, population growth… A lot of people are close to the edge. I mean even a lot of upper-income households are living paycheck to paycheck.”
One positive finding, however, is that just over half – 53% – of people regularly pay off their credit card balances.
However, Bank of America finds that there’s been an increase of customers making withdrawals from 401k retirement accounts. LendingTree analyst Matt Schulz says: “The opportunity cost for that is so great because that’s money that’s not going to be able to compound interest for 25-30 years.”
Are you carrying a significant amount of credit card debt? Have you made withdrawals from your 401k?