Debt Consolidation

LendingTree Debt Report November 2018

  • Through the first nine months of 2018, Americans had nearly $4 trillion in outstanding consumer debt.
  • Over $1 trillion of the debt is on credit cards and other revolving debt, and $2.93 trillion is for non-revolving debt such as student loans, auto loans and fixed-rate personal loans.
  • Based on the recent holiday season credit card spending, we expect credit card balances to grow by at least 5% for the remainder of 2018, bringing revolving debt levels to at least $1.06 trillion.
  • Credit card APRs are more than 3 percentage points higher than two years ago, which will add more fuel to revolving balances going forward.
  • Despite the increases in levels, strength in the economy and low unemployment rates suggest consumers can carry the additional weight. Below-average delinquency rates are evidence of that.

$4 trillion in consumer debt approaches

Nine months into 2018, Americans had a cumulative $3.93 trillion in non-mortgage debt. About a quarter of that debt is credit cards and other revolving debt, while the remainder is for car payments, student loans and other fixed-rate loans such as personal loans.


In just five years, Americans will have increased their debt by $1 trillion. Consumer debt eclipsed the $3 trillion mark in 2013. By comparison, the previous $1 trillion milestone — from $2 trillion to $3 trillion of consumer debt — took more than 10 years.

Holiday spending, reviving economy, higher interest rates likely to increase credit card balances even more than previous years

From 2011 through 2017, fourth-quarter credit card balances have increased an average of $39 billion, with the increases ranging from 2% to 6%.



But current economic conditions suggest that balance increases will be even larger this year. Credit card APRs have increased by more than 3 percentage points over the past two years to the current average APR rate of 16.6%. A consumer carrying a $4,000 credit card balance two years ago would pay $540 in interest, based on the average APR in 2016 of 13.3%. But now, with interest rates at 16.6%, a $4,000 balance means an additional $120 in interest payments annually. Collectively, these increases in APRs will result in balance increases accelerating in the coming months.

Delinquency rates remain low across all types of consumer debt

The recent correction in U.S. stocks, at least for now, appears to be independent of any consumer-related behavior, in either a slowdown of spending or in delinquency rates. While home purchases have slowed in recent months, consumer spending and confidence remains relatively high, and unemployment rates are still below 4% — a level many economists consider full employment.

Collectively, consumers appear to be more than capable to carry the additional debt. Delinquency rates for all types of debt, mortgage and otherwise, remain at below-average levels, and nowhere near the rates seen 10 years ago at the low point of the Great Recession.



Debt Consolidation Loans Using LendingTree