Bull Session | As Interest Rates Rise, Are You Struggling With Your Credit Card Debts?
Increasing numbers of US consumers are saddled with credit-card debts for longer periods and struggling to pay them down amid high inflation and rising interest rates, according to a survey reported by Bloomberg on Monday.
60% who have credit card debt have owed their creditors for at least 12 months. The percentage of people who have been in credit card debt for at least a year increased substantially — a whopping 10 percentage points from last year."
--- said Ted Rossman, senior industry analyst for CreditCards.com.
--- said Ted Rossman, senior industry analyst for CreditCards.com.
The survey also shows that the share of people who have been in debt for over 2 years increased from 32% to 40%.
Although total credit-card balances remain slightly lower than before the pandemic, decades-high inflation has taken a toll on the precarious finances of many US households."
--- Bloomberg reporter Alexandre Tanzi commented.
--- Bloomberg reporter Alexandre Tanzi commented.
Reasons for Credit Card Debt Longevity
About half of credit card holders (carry debt from month to month) stated that covering emergencies and unexpected expenses is the primary reason for the debt. Such as emergency or unexpected medical bills and home/car repairs.
About a quarter of respondents said day-to-day expenses are the major factors for carrying the debt. Such as groceries, childcare and utilities; retail purchases like clothing and electronics; some unpaid balances were for vacation or entertainment expenses.
Economic Concerns on Credit Card Debt
Even though Americans' total credit card balances are down 4% from late 2019, according to the New York Fed, our data is further evidence of the K-shaped economy. While many people are doing better, sadly, many others are doing worse.”
---Rossman added.
---Rossman added.
With recession worries, the participants said losing their jobs would significantly impact their ability to make at least minimum credit card payments over the next year. Meanwhile, continued high inflation causes rising costs of goods and services is another concern.
The Federal Reserve will likely raise interest rates again in this week's meeting. Credit-card rates are typically directly tied to the Fed Funds rate, which may lead to higher delinquencies.
So mooers, do you carry credit card debts? If so, are you struggling with the debts?![]()
Source: CreditCards.com, Bloomberg
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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eldemoniodejaime : If you owe the bank $100 that’s your problem, if you owe the bank $1 million that’s the bank’s problem