U.S. credit card debt has increased. Here’s why.


>>> CREDIT CARD DEBT IN THE U.S. HAS PASSED $1 TRILLION FOR THE FIRST TIME EVER, THE AVERAGE BALANCE JUST OVER $5,900 IN FACT SECOND QUARTER OF 2023. JOINING US WITH MORE, MICHELLE WRIGHT, FOUNDER OF CREDWRITER.COM. SO WHY HAVE BALANCES INCREASED IN RECENT YEARS? >> IT'S USUALLY A SYMPTOM OF AN UNDERLYING PROBLEM. RECENTLY, CONSUMERS HAVE FACED A LOT OF ISSUES WITH INFLATION, AND EVEN THOUGH INFLATION FIGURES ARE STARTING TO TREND DOWNWARD, PRICES ARE STILL UP FOR A LOT OF PEOPLE ON A TON OF GOODS AND SERVICES.


THAT'S LIKE A PAY CUT FOR MILLIONS OF CONSUMERS. ON TOP OF HIGH PRICES, PEOPLE ARE FACING RISING INTEREST RATES. LAST JANUARY I PERSONALLY GOT A MORTGAGE FOR 2.75%. TODAY THAT WOULD BE 6.99%. IF YOU LOOK AT THE MEDIAN PRICE OF A HOME TODAY, WHICH IS $410,000, THE DIFFERENCE IN PRICE ON A MORTGAGE WOULD BE OVER $1,000 A MONTH DIFFERENCE IF I HAD PURCHASED A HOME FOR THE MEDIAN PRICE TODAY VERSUS LAST JANUARY.


AND CREDIT CARD INTEREST RATES ARE ON THE RISE AS WELL. THE AVERAGE CREDIT CARD INTEREST RATE IN 2022 WAS 16.65 PERCENT ACCORDING TO THE FEDERAL RESERVE. IN MAY OF 2023, IT WAS 22.16%. SO BETWEEN INFLATION AND RISING INTEREST RATES, IT'S JUST PLACING A STRAIN ON THE FINANCES OF PHYSICALS OF AMERICANS. THAT'S JUST CAUSING CREDIT CARD DEBT TO SOAR UPWARD, AS WE SEE WITH THE INCREASING CREDIT CARD DEBT FIGURES FOR PEOPLE ACROSS THE COUNTRY. >> INFLATION HAS MADE THINGS WE PURCHASE MORE EXPENSIVE, AND I THINK IT'S WELL DOCUMENTED, A LOT OF SHOCK THERAPY THAT'S GONE INTO HOW WE HAVE COPED BOTH WITH THE PANDEMIC AND WITH THE ANXIETY THAT WE HAVE HAD IN THIS POSTPANDEMIC NEW REALITY. I'M WONDERING IF YOU COULD TELL US MORE ABOUT WHAT AGE GROUPS IN THE U.S. ARE STRUGGLING THE MOST TO PAY OFF THE CREDIT CARD DEBT. >> ABSOLUTELY. YOU MENTIONED IT'S JUST UNDER $6,000, THE AVERAGE BALANCE PER CONSUMER. DIFFERENT AGE GROUPS ARE AFFECTED DIFFERENTLY. THE AGE GROUP WITH THE HIGHEST CREDIT CARD DEBT IS 40 TO 49- YEAR-OLDS, AND THE AVERAGE CREDIT CARD FOR THAT AGE GROUP IS $7,600.


AND GENERATION X OR AROUND THAT GROUP HAS AN AVERAGE BALANCE OF 7,$336 FOR THEIR AVERAGE BALANCE. BABY BOOMERS ARE NEXT WITH AN AVERAGE OF 5,$800 THEN MILLENNIALS WITH JUST OVER $5,000. THE YOUNGER GENERATION IS USUALLY ABLE TO CHARGE LESS THAN OLDER GENERATIONS BECAUSE THEY HAVE NOT GOTTEN THE HIGHER CREDIT LIMITS AVAILABLE TO THEM. >> REAL QUICK, WE PROMISED TIPS. DOES IT MAKE SENSE TO ROLL OVER CREDIT CARD DEBT INTO A 0% INTEREST NEW CREDIT CARD? >> YES, IF YOU CAN DO IT RESPONSIBLY AND AVOID FUTURE OVERSPENDING.



As found on YouTube

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