Credit card debt growing again

U.S. credit card debt peaked at $969 billion at the end of 2008, then crashed to $876 billion by September, and stayed there through the end of the year, notes Odysseas Papadimitriou, former Capital One Corp. credit card marketing executive who now runs in Arlington, Va., citing Federal Reserve data.

So Americans are borrowing less? Nope: Most of the drop -- $83 billion of the $93 billion decline -- is due to "charge-off" debts that borrowers have defaulted on and aren't paying back, Papadimitriou told me, citing data from Bank of America, JPMorgan Chase, Citi and other major issuers.

All of the drop occurred last winter; net borrowing by credit card users crept up toward the end of the year.

That means Americans haven't learned our less, Papadimitriou says. "A big reason we entered into that recession was consumers and corporations -- and even countries, if you look at what's going on in Greece -- had debt levels that were not appropriate relative to the income levels of the consumers. So if you see consumers going back to where they were, we haven't actually learned. We're just pushing on the inevitable, another debt crisis. It's positive that consumers are feeling confident in their spending. But spending on things your income can't justify is just wrong."

Papadimitriou says fewer banks lend to people with bad credit. But his own site advertises high-fee "secured" cards from at least three different banks, typically targeted to people with a history of not paying bills.

"The key question is, have consumers and banks and regulators really learned something?" Papadimitriou concluded. "Or is the same thing going to happen again in three, four, five years?"