America’s total credit card debt is more than $1 trillion… Shouldn’t we be worried?

Federal Reserve data shows that Americans owed just over $1 trillion on credit cards in February 2017, a level not seen since late 2008. Furthermore, credit card debt has roughly doubled in the United States over the past 20 years.

In fact, credit card debt peaked in April 2008 at a level just 1.7% more than the current one, so it’s fair to say that we could easily eclipse the all-time record in a manner of months if Americans continue to accumulate credit card debt.

Should we worry?

Just because Americans’ credit card debt is at levels not seen since the financial crisis began doesn’t necessarily mean that there’s reason to panic. That said, it’s perfectly reasonable to expect a higher level of delinquencies if the rising debt trend continues.

According to Matt Schulz, senior industry analyst at CreditCards.com, “Credit card debt is rising quickly, but delinquencies are still really low. Many Americans are doing a good job of controlling their debts, but eventually with big debts and rising interest rates, it’s likely that something will have to give. I expect delinquencies to start rising more quickly in 2017.”

In other words, will higher credit card debt loads lead to an uptick in delinquency rates? Probably. Will they lead to a near financial collapse like we saw in 2008? Probably not. Consumers as a whole have a different mind-set now than they did in the pre-crisis era. And it’s also worth noting that when adjusting for inflation, credit card debt levels in 2008 were still significantly higher than they are now.

However, according to Schulz, the rising debt might not be over just yet. “2017 will be a record-setting year for credit card debt. Americans’ credit card debt will almost certainly reach its highest levels ever later this year and keep growing from there.”

Also, keep in mind that most credit cards have variable interest rates, and rates are expected to rise over the next few years. “Add in a few expected rate increases from the Fed over the next two years, and that makes it even more important than usual to focus on paying down your credit card debt,” said Schulz.