Americans Owe Banks $1 Trillion in Credit Card Debt
According to a report by The Hill published on May 30, 2023, the average American household now holds $10,000 in credit card debt. In total, Americans hold $1 trillion in credit card debt.
The average interest rate is 24% and monthly payments for a new credit card are $250. At this rate, it will take households until 2030 to completely pay off their debt.
Per data from the Federal Reserve, US credit card debt hovered around $986 billion. This figure represents an increase of $250 billion over the last two years.
Other sources point to a higher credit card debt load. Per a WalletHub report, the total debt at the end of 2022 stood at $1.2 trillion.
“In 2021, we saw people paying off a record amount of debt,” a senior analyst at WalletHub Jill Gonzalez commented. She added, “People had been saving through 2020, without much to do.”
Per a new poll carried out by the Fed, the country’s record high inflation has provoked massive economic insecurity among the general populace.
Governments accumulated massive debt throughout the Wuhan virus pandemic as they spent billions of dollars to keep their economies afloat and provide assistance to their population.
Concurrently, the Fed kicked off an unprecedented campaign of interest rate increases while the inflation rate was climbing upward to record levels.
In 2022’s fourth quarter, credit card debt increased by $86 billion, which represented the largest debt increase on record.
In total, one-third of US households point to inflation as their current financial challenge. This represents an increase of over 400% from 2016.
A US study published in 2023 predicted that the United States is expected to enter a recession in 2023 and face high levels of inflation well into 2024.
Overall, the US’s dilapidated economic state is the product of its awful leadership class. Bad economic policies — such as easy money, regulation, and big spending — create the conditions for a stagnant economy with inflation eating away at its productive capacity.
The only way to reverse course is here for the US to embrace sound money, end the regulatory state, and cut government spending across the board.