HOUSTON (CW39) — Higher prices, inflation and a looming recession has led many consumers to max out on their credit cards. Now it’s starting to show up as more and more are accumulating additional debt.
Credit Card Debt Study Key Stats
- Texas Debt: The average household in Texas owes $8,681 in credit card debt, following a $593 Q2 increase.
- Record Q2 Increase. Credit card debt increased by almost $67.1 billion during Q2 2022, an all-time record for the second quarter of the year.
- Bigger-Than-Normal Buildup. Consumers’ Q2 2022 credit card debt increase was 3.5X bigger than the post-Great Recession average for a second quarter.
- Record Annual Projection. WalletHub projects that consumers will end the year with roughly $110 billion more in credit card debt than they started with, which would be close to an annual record.
The study shows during the 2nd quarter of 2022 the country as a whole racked up $67.1 billion in debts. That is an all-time record for credit card debt added during the second quarter of a year, and WalletHub now projects that consumers will add a total of $110 billion in debt during 2022.
And with the Federal Reserve expected to raise its target rate by 75 basis points on September 21, WalletHub anticipates this will cost people with credit card debt an extra $5.3 billion over the next 12 months.
|States with the Biggest Debt Increase||States with the Smallest Debt Increase|
|New York||South Dakota|
In addition, the rise in debt is not even around the country, as some areas have bigger payment problems than others.
Fed Rate Hike Survey Key Findings
- More Costly Debt. A Federal Reserve interest rate increase on September 21 would cost people with credit card debt an extra $5.3 billion in the next year alone. That’s on top of the $15.3 billion increase already caused by the Fed’s previous rate hikes this year.
- Inflation Concerns. 85% of Americans are concerned about inflation right now.
- Fed Increases Affecting Wallets. 63% of people say their wallets have been affected by the Fed’s rate hikes this year.
- Monthly Expenses Affected. 62% of people say inflation has affected their monthly grocery expenses the most, followed by gas (32%) and housing (6%).
- Government Intervention at the Pump. 71% of people think the government should put a cap on gas prices.
- Not Recession-Ready. 44% of people do not think they are financially prepared for a recession.
- High Inflation Preferable to High Unemployment. 56% of Americans say they would prefer high inflation over high unemployment.
For the full rankings, check WalletHub’s study here.