The "revenge" of the credit card

The Americans are "building" a big debt on plastic money again

3aff111b9a44af7881ec2a7872945d5c 10 AMERICA, Credit Cards, Plastic Money

The festive markets are back with a vengeful trend this year. But indebtedness is a gift you can not repay.

After the Americans repaid the record $ 83 billion credit card debt in 2020, with the help of government incentives and fewer opportunities for discreet purchases, credit card balances are rising again.

Overall, credit card balances increased by $ 17 billion in the third quarter of 2021, according to the latest figures from the Federal Reserve Bank of New York.

According to CNBC, in the fourth quarter, fueled by the return of vacation plans, consumers are charging billions more.

By the end of the year, Americans are now well on their way to ending $ 70 billion in extra credit card debt, according to a forecast by personal finance website WalletHub.

The average household card balance is now $ 8.006, according to WalletHub.

Balances are expected to continue rising in 2022, ending the first quarter up 10% higher than a year ago, as more consumers apply for credit and increase their spending, according to a TransUnion forecast. Usually, the balance of the cards decreases in the first months of the year, as the borrowers repay their vacation expenses.

By the fourth quarter of 2022, total balances are expected to reach $ 805,7 billion, TransUnion has found - the highest level since the pandemic began Covid-19.

"The consumer landscape is starting to look more like the pre-pandemic era," said Charlie Wise, head of global research and consultants at TransUnion. "With the end of tolerance programs and the depletion of stimulus funds, the demand for credit is increasing."

However, credit card debt is particularly difficult to repay, especially with an average annual rate of more than 16%.

SOURCE: Financial Postman