credit card debt is rising.
Americans now owe record amounts $1.14 trillion The New York Fed reported Tuesday that their credit cards.
According to separate quarterly data from the credit industry, the average balance per consumer was $6,329, up 4.8% annually. Insight report From TransUnion.
credit card delinquency rate The New York Fed and TransUnion found those numbers were also higher across the board. The New York Federal Reserve reported that about 9.1% of credit card balances fell into delinquency last year.
Borrowers holding revolving debt “are maxing out their credit cards,” said Michele Raneri, vice president and head of U.S. research and consulting at TransUnion. “That’s generally a good sign that people are stretched thin.” “
It’s time to “re-evaluate” retaliation spending
“Card balances declined briefly in 2020 and early 2021 due to pandemic-related factors,” said Ted Rossman, senior industry analyst at Bankrate. These included stimulus checks from the government and fewer spending opportunities.
“But since the start of 2021, credit card balances have surged 48%, driven by a post-pandemic boom in services spending coupled with high inflation and interest rates,” he said.
Consumers have shown great willingness to purchase Splurge while traveling and entertainmenta recent report bank interest rate It also shows the need to regain the experiences they have lost during the COVID-19 pandemic.
“Maybe people can re-evaluate this now,” Raneri said.
surge”retaliatory spending“It’s been going on for several years now,” she added. “Maybe there’s a way to target it so they can check in on some of the things they feel they’re missing and get back to normal.”
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Credit cards are one of the most expensive ways to borrow money. The average credit card charge is over 20% — close to record high.
“With credit card balances at an all-time high and average credit card interest rates hovering near record levels, it’s more important than ever to pay off this debt as quickly as possible,” Rothman said.
If you have a balance, try consolidating and paying off high-interest credit cards with lower interest personal loan Or switch to a no-interest balance transfer credit card, he suggests.
