Credit Card Debt Increased by $180.3 Billion in 2022
After a year in 2021 that saw credit card debt declining during all four quarters, 2022 officially saw debt steadily increasing. According to new figures from WalletHub, consumer credit card debt increased by $85.8 billion during the fourth quarter of 2022. This marks the largest quarterly increase on record. It also brings 2022’s total to $180.3 billion in credit card debt added. As WalletHub notes, the Q4 2022 increase was 1.8 times higher than the post-Great Recession average for fourth quarters.
Once again, WalletHub also looked at cities with the largest and smallest debt increases during the year. Starting with the latter, Lewiston, Maine was found to have the smallest average credit card debt increase, with a household increase of just $312. With that increase, the average Lewiston household has a total of $8,200 in credit card debt. Following close behind, residents of Casper, Wyoming saw debt increase by an average of $318 to reach $10,389. Others in the top five included Manchester, New Hamshire (+$371), Rapid City, South Dakota (+469), and Oklahoma City, Oklahoma (+665).
Turning to cities with the largest debt increases, Santa Clarita, California topped the list, placing 182nd of 182 cities ranked. For the year, average household credit card debt in the Los Angeles County city increased $4,053 to hit $19,036. Fellow Golden State cities San Bernadino and Glendale followed, gaining $3,007 and $2,912 in credit card debt, respectively. Port St. Lucie, Florida (+$2,798) and Chula Vista, California (+$2,748) rounded out the bottom five.
Commenting on this latest report, WalletHub analyst Jill Gonzalez issued a warning, stating, “The latest credit card debt statistics tell us that U.S. consumers are on a dangerous trajectory. We racked up a record $180.3 billion in credit card debt during 2022, so it’s no surprise that 56% of people say they have more credit card debt than they did 12 months ago.”
Gonzalez continued, “It’s not just financial health we have to worry about. WalletHub’s survey found that 45% of people say credit card debt makes them feel stressed, and more than 1 in 3 Americans with credit card debt say they would do anything to be debt-free. Let’s hope that includes buckling down and paying off debt this year.”
Unfortunately, it’s not hard to imagine why credit card debt has increased so much in the past couple of years. For one, inflation continues to be a major issue impacting just how far a consumer’s paycheck will go. On top of that, interest rate hikes make paying off debt more difficult as it costs more to carry a balance. With these factors at play, it seems unlikely that Q1 2023’s result will be much different — but, we’ll have to wait and see what trends emerge as the economy continues to evolve.