Credit Card Debt at Record High for Year
America rounded out 2010 with $800 billion in credit card debt, and this year we came pretty close—holding a whopping $798 billion in debt at the end of 2011. Where did Americans spend all that money? It’s become clear as analysts look at the unexpectedly high Black Friday and holiday sales that holiday shoppers stretched their budgets just a little too thing this season, spending over $52 billion in credit card sales during Black Friday weekend alone and surged by $20.4 billion in November.
Although these numbers seem high, the data for December has not yet been released. Considering the strong sales season retailers had, it will come as no surprise when December credit card debt looks similarly grim.
What’s making people feel so free to put purchases onto credit cards? Curtis Arnold of CardRatings.com told Time Magazine that one major factor is promotions form credit card companies that offer 0% APR for a limited time, temping consumers into using charge because there’s less immediate risk of penalty. However, he warns, when these promotional rates start to expire, it’s going to be a rude surprise for card holders who will quickly see interest charges adding up and their credit score going down.