A credit card is a great tool that can provide a consumer with a convenient form of financing. Those that have credit cards will have the ability to quickly pay for goods and services. However, those that use a credit card and do not pay off the balance in a timely manner will be hit with a variety of fees and interest charges.
Over the past two decades, the rate of credit card usage has continued to increase. In the mid 2000s, this rate of credit card usage was partially to blame for the overall credit crisis in the country. While the rate of credit card usage, and overall level of credit card debt decline, it appears to be increasing back towards all time high levels (https://panampost.com/editor/2017/05/25/any-of-these-3-bubbles-could-be-about-to-burst/).
According to a recent study, the level of credit card debt in the United States is now over $1 trillion. This is the highest it has been since 2009. While the credit card debt balances are very high, they are now coupled with a growing student loan bubble, which is at an all-time high of nearly $1.5 billion. Furthermore, other types of consumer debt, including auto loans, has also increased.
The impact of the increase in credit card debt is already beginning to show some serious signs. One of the largest providers of credit cards in the country, Capital One, has already written off 5% of their past due balances. This could end up having a sizable impact on their total reported earning.