Why U.S. credit card debt is at an all-time high


>>> WE ARE BACK WITH A LOOK AT MAERNDZ' FINANCES AS WE APPROACH THE HOLIDAY SHOPPING SEASON. AMERICANS ARE DIGGING THEMSELVES DEEPER INTO CREDIT CARD DEBT WHICH IS HITTING AN ALL TIME HIGH >> FOR THE FIRST TIME EVER THE TOTAL CREDIT CARD DEBT HAS TOPPED $1 TRILLION, A $154 BILLION SPIKE FROM THIS TIME LAST YEAR. AND THE LARGEST INCREASE IN MORE THAN TWO DECADES >> FOR MORE, WE ARE JOINED B INVESTOPEDIA EDITOR CALE SILVER BREAK IT DOWN AS TO WHOI WE AR SEEING THIS.


>> THIS IS THE LARGEST DEB INCREASE SINCE 1999. WE ARE SPENDING A LOT. PERSISTENT INFLATION IS SLOWIN BUT PRICES ARE STILL HIGH. CREDIT CARD APRs ARE NORTH O 20%. THAT IS THE INTEREST YOU PAY O THE CREDIT CARD, THAT IS VARIABLE SO AS THE FED IS RAISING INTEREST RATES, THOSE RATES AR GOING UP BUT WE SPEND INTO IT AND DEBT IS INCREASING THAT'S WHAT WE ARE SEEING NOW. >> SO FIRST, I WOULD LIKE TO POINT OUT THAT YOU SAID WE ARE APPROACHING THE HOLIDAY SEASON NO ONE NEEDS TO START YET. I CERTAINLY HAVEN'T. BUT PEOPLE WILL START SPENDING MORE ACCORDING TO THE NATIONAL RETAIL FEDERATION, PEOPLE WILL BE U WITH THE SPENDING, AN AVERAGE OF $875 ON GIFTS. WHAT HAPPENS WHEN YOU FACTOR THAT INTO THE DEBT >> YOU WILL SEE MORE CREDIT CARD DEBT MORE BUY NOW PAY LATERUSAGE THAT IS ALREADY UP 10 FOLD. THAT IS ALSO ANOTHER FORM OF RESOLVING CONSUMER DEBT.


WE ARE SPENDING OURSELVES INTO DEBT THE SAVING RATE THAT WAS HIG DURING THE PANDEMIC IS GONE FROM A HIGH OF 14% TO 15% TO ABOUT 2% TO 3%. LESS SAVINGS, MORE SPENDING AT HIGHER APRs AND YOU GET RECORD DEBT >> I WANT TO ASK YOU ABOUT BUY NOW, PAY LATER, BECOMING POPULAR, NO FEES, NO INTEREST. YOU MAY BACK WITHIN 6 WEEKS. HOW DOES THAT COMPARE WITH CREDIT CARDS WHAT ARE THE PROS AND CONS O THAT >> THE PROS ARE THE LACK O INTEREST ON IT BUT A LOT OF PEOPLE BECOME VER DELINQUENT ON THE SERVICES PEOPLE WITH THE LOWEST CREDI SCORES AND THE LOWEST ABOUT TO BORROW USE IT.



IT IS A CYCLICAL DEBT CYCLE THAT YOU GET INTO IF YOU DON'T PA THE LOANS BACK A LOT OF PEOPLE TURN TO THOSE OR CREDIT CARDS NOW EVEN IF THE HAVE HIGH BALPSS BECAUSE THE DON'T WANT TO NOT SHOP WE SHOP LIKE IT'S OUR JOB IN THIS COUNTRY >> GIVE US SOME ADVICE HOW SHOULD WE PAY THIS DOWN IF WE ARE SITTING IN CREDIT CAR DEBT >> LOT OF PEOPLE ARE IF YOU HAVE A HIGH RATE, CALL UP YOUR CREDIT CARD COMPANY THEY DON'T WANT TO LOSE YOU.


NEGOTIATE A BETTER RATE. AND IF THEY WON'T, OTHER COMPANIES WOULD LOVE YOU BUSINESS CONSULIDATE UNDER A NEW ONE. OR TAKE OUT A PERSONAL LOAN AT A LOWER RATE YOU HAVE TO PAY THAT TOO DON'T GET YOURSELF INTO A CYCL WHERE YOU ARE BORROWING FROM ONE TO PAY THE OTHER WITHOUT PAYIN THE BALANCE OFF. CONTROL THE SPENDING IT'S HARD GOING INTO THE HOLIDAY SEASON BUT YOU HAVE TO REPAY THE DEBT KEEP IT LOW. >> ONCE WE GET INTO TH HOLIDAYS, WE WILL SEE PEOPLE PULL BACK ON THE SPENDING. ARE WE HAD HEADED THAT WAY >> PROBABLY BUT WE NEVER KNOW.



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