Estimated read time: 1-2 minutes
SALT LAKE CITY — The news around consumer debt has been bleak. Data from the Federal Reserve Bank of New York shows household debt has been increasing since the pandemic, and now sits at $17.29 trillion – a new record.
The continual climb makes sense after the past couple of years of price increases on everything from gas to groceries.
"We hit a record-high, an absolute record-high of $1.2 trillion in credit card debt," said Christie Mathern, an editor at WalletHub. "That is a huge number."
But there may be a silver lining, she said. In the long run, the same inflation contributing to the eye-popping record debt numbers also softens the blow.
"When you adjust for inflation to compare this number to past years, our current credit card debt total is actually 15% lower than the highest number in 2008," Mathern said.
The year 2008 was a record debt year at the height of the Great Recession. It's not exactly a goalpost for which economists think we should strive, but it is a little cushion to the blow that our debt feels like it's out of control.
"Yeah, you have a big number here," Mathern said. "And yes, inflation is bad. But also know the sky is not quite falling."
The best way to get out of debt is to set a budget and stick to it — knowing it won't happen overnight.
Other ideas including considering a 0% interest credit card, and trying to pay off credit cards starting with the card that has the highest interest rate first.
