Americans face mounting burden of credit card debt


>>> IT IS FOR:00 P.M. THE NEW YORK STOCK EXCHANGE HAVE ANOTHER DAY OF TRADING, GOING UP ABOUT 550 POINTS. THE S&P 500 UP ABOUT 2 1/2% WITH THE NASDAQ IS UP ABOUT 3 1/4%. ONE LINGERING ECONOMIC CONCERN IS THE RISE IN CREDIT CARD DEBT. THE FEDERAL RESERVE BANK OF NEW YORK SAYS AMERICAN CREDIT CARD DEBT ROSE TO $887 BILLION IN THE SECOND QUARTER OF THIS YEAR. OUR NEXT GUEST RIGHTS IN THE WASHINGTON POST, CREDIT CAR BARS FACE MOUNTING BURDENS AND TO BREAK IT ALL DOWN SHE JOINS ME NOW. AN ECONOMIC CORRESPONDENT FOR THE WASHINGTON POST. WHAT IS DRIVING AMERICANS TO BORROW MORE ON CREDIT CARDS? >> IN A WORD, INFLATION. WE HAVE TO GO BACK A COUPLE YEARS TO GET THE FULL PICTURE.


MANY FAMILIES HAD EXTRA MONEY EARLY ON IN THE PANDEMIC TO PAY DOWN BILLS. WE SAW AMERICANS PAY DOWN BILLIONS IN CREDIT CARD DEBT. THEY HAD EXTRA SAVINGS, GOVERNMENT STIMULUS MONEY. INFLATION HAS GOTTEN WORSE AND THAT HAS REVERSED. WE ARE STARTING TO SEE PEOPLE CHARGING MORE ON THE CREDIT CARDS AND OWING MORE THAN USUAL. >> ONE CONCERN WE'VE HAD IS TALK OF RECESSION. HOW COULD MOUNTING DEBT MAKE IT WORSE IN TERMS OF AN ECONOMIC SLOWDOWN FOR EVERYBODY? >> WE ARE IN THIS MOMENT WHERE THE ECONOMY IS STRONG. UNEMPLOYMENT IS VERY LOW. MANY PEOPLE STILL HAVE JOBS.



THE FEAR IS IF THERE IS A SLOWDOWN, IF THERE ARE MANY JOB LOSSES WE COULD START TO SEE MAJOR DEFAULTS ON CREDIT CARD DEBT. >> HOW MUCH DO YOU THINK NATIONAL RENT-A-CAR DEBT FACTORS INTO THE FED DECISION IN THE NEXT MONTH OR SO AS WE EXPECT THEY WILL CONTINUE RAISING INTEREST RATES? DOES IT PLAY A ROLE IN THAT? >> IT DOESN'T PLAY A ROLE, BUT THE DECISION TO RAISE INTEREST RATES WILL CONTINUE TO IMPACT PEOPLE WITH CREDIT CARD DEBT. THAT MEANS INTEREST RATES ARE RISING AND THEY OWN MORE AS A RESULT. >> WELL, WE ARE VERY GRATEFUL. IT IS GOOD TO LOOK AHEAD AND TO KNOW WE CAN EXPECT THINGS TO GET WORSE. IF YOU CAN.



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