The last few years have brought a booming economy, with wages up, unemployment at historic lows, and the stock market setting record highs. But none of that has made a dent in Americans' personal debt. According to a new report from the website Bankrate, just 35% of credit card debtors owe less now than just after the Great Recession. "We found that two-thirds of people in credit card debt owe as least as much now as they have over the past ten years," says Ted Rossman, credit card analyst for Bankrate. In fact, the report finds 40% say their debt is now higher than usual.
Rossman tells KTRH that although people are making more now and doing better financially than a decade ago, they're also spending (and borrowing) more. "They're not falling behind, which is a silver lining here, because we see credit card delinquencies remain very low---but they're not getting ahead either," he says. "A lot of people continue to spend right up to the limit of their means."
Those who are still dragging around high debt loads may be missing a huge opportunity right now. "The economy is good, the job market is strong," says Rossman. "It is really important, though, to take advantage of these good times to pay down your debt, rather than just living right at the edge of your means."
There are signs of the good economy in the report. For instance, more than three times as many cardholders now feel better about paying their credit card bills on time (34%) than those who feel worse about making their payments (11%).
Rossman offers several recommendations for those looking to cut into their debt, such as adding an extra part-time or temporary job, selling off old items, or cutting unnecessary expenses like premium movie channels and gym memberships. "Ultimately you've got to either raise your income, cut your expenses, or both, to make meaningful progress toward your credit card debt," he says.