Consumers paid down their credit card debt during the first quarter of 2014 but at a slower rate than in the past two years, setting the stage for an increase in credit card debt at the end of the year, according to CardHub’s 2014 Credit Card Debt Study.
Consumers paid down $32.5 billion in outstanding credit card debt during the first quarter of 2014. That is 1 percent less than was paid off during the first quarter of 2013 and 5 less than in 2012, CardHub says. The decrease in the payoff amount for the first quarter represents a deterioration in credit card habits, the report says.
“Consumers historically pay off a lot of credit card debt during the first quarter of the year with tax refunds, annual salary bonuses, and New Year’s resolutions fueling their efforts,” CardHub says.
CardHub predicts that the slowdown in the pay off rate will mean consumers will end 2014 with an increase of $41.9 billion in credit card debt. Credit card debt totaled $801.3 billion at the end of the first quarter this year, according to CardHub.
The average household credit card debt was $6,628 at the end of the first quarter, a decrease of $352 from the end of 2013.