Americans have accumulated one trillion dollars in credit card debt

Americans accumulated a record amount of credit card debt in 2023, surpassing a trillion dollars. However, economists suggest that a significant pullback in consumer spending, a key driver of the US economy, is unlikely this year.

Despite the surge in credit card debt, economists point out that workers are still enjoying strong wage increases, the stock market is stable, attitudes toward the economy have significantly improved, and consumers spent robustly during the holiday season.

While nominal credit card debt has surged, inflation-adjusted data shows it is nearly 20% lower than its peak in late 2008, according to an analysis of New York Fed data by WalletHub. Economists believe that Americans are well-equipped to manage their balances.

“Consumers still have a lot of money left over to be able to spend, so the credit card data is often misinterpreted,” said Russell Price, chief economist at Ameriprise Financial. “The dollar value of credit-card debt is at an all-time high, but so is population, employment, and consumer income.”

Credit card debt reached a new nominal high of $1.13 trillion from October through December, according to the Federal Reserve Bank of New York. However, it’s important to note that about 55% of borrowers pay off their balances in full each month, which is a significant factor not always considered in the data, as noted by New York Fed staff in a blog post.

On Friday, Pearson and fuboTV will report their earnings. The European Union’s statistics agency will release inflation figures for February. S&P Global and the Institute for Supply Management will release surveys measuring economic activity in the US manufacturing sector for February. The University of Michigan will release its final reading of consumer sentiment for February. Fed officials Christopher Waller, Raphael Bostic, Mary Daly, and Adriana Kugler are scheduled to deliver speeches.

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