Americans Accumulate More Credit Card Debt - Again

Woman with credit cards
Woman with credit cards

Nothing conflicts a personal finance writer like the news that Americans are spending again. On one hand, consumer spending makes up a whopping 70% of our domestic economy, so loosening the purse strings is a good sign from a national economic perspective. From a household budget standpoint, though, a growth in spending can be less benign, especially if that spending takes the form of an increase in credit card debt, which is what the Federal Reserve's most recent numbers show.

According to the Fed's new G19 report, which was released Monday, America's revolving debt (a.k.a. credit card balances) rose 3.5% on an annualized basis in December. By the Fed's numbers, this marks the first increase since 2009, when the amount of revolving debt dropped by 12.4% on an annualized basis in the fourth quarter. Consumers still had an overall decrease in revolving debt in 2010, but it was a smaller decrease than we saw in 2009.