America’s Credit Card Debt Crisis | Newsweek

America’s Credit Card Debt Crisis | Newsweek

America’s Credit Card Debt Crisis | Newsweek

In recent years, the number of Americans grappling with credit card debt has surged, reaching concerning levels. A survey by Bankrate revealed that a staggering 56 million credit cardholders in the United States have been in debt for at least a year. What’s even more alarming is that almost half of all credit cardholders (49 percent) now carry a balance from month to month, a significant increase from 39 percent in 2021. These findings highlight a growing financial challenge for many.

While inflation eased somewhat after a 40-year high in 2022, high-interest rates persist, and many individuals have depleted their savings during the pandemic. Despite a resilient economy, the situation hasn’t improved for many Americans. Bankrate reported that the average credit card interest rate reached a record high of 20.74 percent in 2023, up 4.4 percentage points from the beginning of 2022.

One key reason cited for outstanding credit card balances was the need to cover emergency or unexpected expenses, with 43 percent of respondents mentioning this. This includes medical bills, car repairs, and home repairs, among others. Additionally, 26 percent of cardholders said their debt was related to day-to-day expenses, indicating the ongoing struggle with the rising cost of living.

For many of those with credit card debt, escaping it seems like an insurmountable challenge. One in ten believed they would never be able to pay it off, while 26 percent thought it would take at least five years. However, 47 percent expressed having a plan to tackle their debt.

The situation also varies across generations, with Gen Xers and Millennials being more likely to have credit card debt than Baby Boomers and Gen Zers. The issue of mounting credit card debt is complex and affects people differently based on age, financial circumstances, and ability to manage it……….full-loaf-600x400-1-e1700879832480 America's Credit Card Debt Crisis | Newsweek[read more]

Rising Dough

Rising-Dough-e1700879911412 America's Credit Card Debt Crisis | NewsweekConsidering the rise in credit card debt and its impact on Americans’ financial well-being, what strategies should businesses, financial institutions, and policymakers employ to help consumers better manage their debt and avoid falling into the debt trap? How can marketing and economic factors be leveraged to promote financial literacy and responsible borrowing among different generations?

*Click on the “Full Loaf” icon to read the full article! After you read the full article, let us know your thoughts.

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