Publish dateThursday 1 June 2023 - 12:35
Story Code : 271049
Americans Owe $1 Trillion in Credit Card Debt
Americans have plunged into dire economic straits due to an unprecedented level of debt that added to their economic hardships amid soaring inflation.
Afghan Voice Agency (AVA) - Monitoring: The Hill reported on Tuesday that a typical American household now carries $10,000 in credit card debt, raising America’s credit card balance to the tune of $1 trillion.

At 24 percent average interest rate on a new credit card and monthly payments of $250, it will take households until 2030 to pay off their debt, while spending a total of $20,318, twice what was spent.

US credit card debt stands at $986 billion, according to the Federal Reserve, showing an increase of $250 billion in two years. 

Other sources calculate a higher debt. WalletHub reported $1.2 trillion at the end of 2022.

“In 2021, we saw people paying off a record amount of debt,” WalletHub's senior analysis, Jill Gonzalez, said, adding, “People had been saving through 2020, without much to do.”

A new survey conducted by the United States' Central Bank shows the country's record high inflation has eroded the sense of financial security among American households.

In 2020, the COVID-19 pandemic, reached its peak as a global pandemic, forcing the government to limit people's movement in cities and countries around the globe.

Gradually movement restrictions were removed and spending picked up and saving slowed down.

At the same time, the US Federal Reserve commenced an unprecedented campaign of interest rate hikes while the inflation rate was soaring to record levels.In the fourth quarter of 2022, credit card debt rose by $86 billion, indicating the largest increase on record.

Overall, one-third of US households cite inflation as their current main financial challenge. This shows an increase of more than 400 percent from 2016.

A US study earlier this year predicted that the United States is poised to enter a recession this year and face high inflation well into 2024.
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