Rising Credit Card Debt May Dampen Holiday Season Cheer

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/ Source: CNBC.com

Even before the holiday shopping season is in full swing, shoppers have set themselves up for tight budgets and a New Year's debt headache. Credit card debt is on the rise. Consumers paid off $32.5 billion in debt during the first quarter, but charged $28.2 billion in the second—the largest buildup in six years, according to a CardHub.com study. "We all knew that there was pent-up desire for consumers to begin spending again—we just didn't know when," said Gail Cunningham of the National Foundation for Credit Counseling. That spending boost puts the average household's credit card debts at $6,802, up from $6,682 in the first quarter. Consumers aren't far off, debt-wise, from the average owed at the onset of the recession. "At $8,400 on a household level was where they broke down last time in terms of their ability to pay," said Odysseas Papadimitriou, chief executive of CardHub.com. Last year, consumers spent $602.1 billion on the Christmas/Hanukkah season, according to the National Retail Federation,with the average household spending $730 on gifts, decorations and other holiday purchases.


- Kelli B. Grant, CNBC.com