U.S. consumers are still piling up credit card debt, but at a slightly slower pace than in the past two years, according to second quarter data compiled by CardHub.com.
Traditionally, consumers pay off credit card debt during the first quarter of the year and increase it during the second quarter, CardHub.com says in its Q2 2013 Credit Card Debt Study released Tuesday.
This year followed that trend, but the second-quarter increase was smaller than in the previous two years, CardHub.com says. The $17 billion in new credit card debt erased more than half of the first quarter pay down. CardHub.com is projecting that consumers will end the year with roughly $41.2 billion in new credit card debt.
The second quarter increase for this year is 3 percent smaller than the second quarter increase last year and 12 percent smaller than the 2011 second quarter increase.
But the amount of debt incurred during the second quarter of 2013 is 75 percent higher than what was added in the second quarter of 2010 and 80 percent higher than in 2009.
“We are therefore still heading in the wrong direction, just at a slower pace,” CardHub.com says.
The average household now owes $6,658 to credit card lenders, up from $6,590 at the end of March.
Consumers may be making their minimum payments, but they still are spending beyond their means, says Odysseas Papadimitriou, CEO of the personal finance Web sites CardHub.com and WalletHub.com.
“Such practices clearly aren’t sustainable. At some point, minimum payments will also become unmanageable and consumers will default in droves, putting pressure on the financial sector as well as the economy in general in the process,” he explains. “If we want to avoid creating a double-dip credit crunch and instead foster true economic recovery, we will need to prioritize sensibility over luxuries.”
The study can be found at http://www.cardhub.com/edu/2013-credit-card-debt-study/