WASHINGTON—A new study shows that U.S. consumers are on pace to rack up another $55-plus billion in credit card debt in 2015, despite paying off $34.7 billion in plastic obligations during the first quarter of the year.
That’s a key finding from CardHub’s latest Credit Card Debt Study.
CardHub explained that $34.7 billion in paydowns was 7% larger than those of the past two years. That’s the good news, the company said.
“The bad news is that we simply started with more debt to repay, finishing 2014 with more than $57 billion in new debt and starting 2015 with the largest first-quarter average household credit card balance in six years, at $7,177,” CardHub stated. “This makes seemingly-encouraging improvements easier to come by and apparently more substantial than they really are.”
As a result, CardHub projects that U.S. consumers will end 2015 with a net credit card debt similar to that of 2014 – roughly $55.8 billion.
Other key findings:
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Credit card defaults also declined by more than $350 million in Q1 2015 compared to the first quarter of 2014, bringing the Q1 default rate to its lowest point since 1995.
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The Q1 2015 debt paydown is still 29% below the recent peak payoff – $44.8 billion in the first quarter of 2009.
- Despite first quarter improvements, U.S. credit card habits show signs of regression to pre-recession levels. “The second quarter of 2015 will therefore offer a lot of context to our current trajectory, enabling us to better authenticate trends that appear to be emerging,” CardHub said.