The economy is booming, and Americans are still charging. Even as unemployment goes down and wages go up, people can't seem to resist spending more than they make. The latest WalletHub credit card debt study shows consumers racked up $29.8 billion in new credit card debt during the second quarter of this year, the fourth-largest increase ever in Q2. Of that new debt, $287 million comes from Houston.
The figures are somewhat surprising considering the resurgent economy in recent years. "It seems that people haven't necessarily learned their lesson about spending more than they have, since the recession," says Jill Gonzalez, WalletHub analyst. Indeed, Americans began this year with more than $1 trillion in credit card debt for the first time ever, and are expected to add another $100 billion onto that by the end of 2018.
Spending habits are not the only factor in growing U.S. debt, however. The Federal Reserve has steadily raised interest rates in recent years as the economy has grown, with another rate hike considered almost a certainty later this month. "We already owe more money, and overnight, every time the Fed raises rates we owe that much more money without even having spent a penny more," says Gonzalez. "Just looking across the board, we're expecting every rate hike to add $15 million to that Houston credit card budget, essentially."
On the other hand, all of these rate hikes are also a sign that overall, things are going pretty well. "There's good news for Texas and good news for Houston, as far as the economy still looking on the up," says Gonzalez.