With the rapid development of economy and technology,it is no longer unusual for everyone to have a credit card.Therefore,credit card debt has become a new problem for people nowadays.This also leaves some Americans struggling to pay off credit card debt.And as time goes by,this situation becomes more and more obvious.So did you know these things?
Did you know the trend?2024 was a year that looked good and felt bad, financially, for many. According to NerdWallet’s annual household debt analysis, revolving credit card debt is up year-over-year, but only slightly, and the gap between cost of living and income growth is narrowing, pre-pandemic to now. Revolving credit card debt is up just 1.5% compared to 2023. On average, a household with revolving credit card debt owes $10,563. Mortgage, auto loan, student loan and overall total household debt have also all increased slightly from last year.
From this we can see that per capita debt is increasing day by day.So did you know what cause this to happen?I think there are two reasons.First,cost of essentials has outpaced income growth since 2019.There is material display:since 2019, overall costs are up around 23%, while income has grown 21%. While cost-of-living growth is higher, it’s not significantly outweighing income growth during this time frame. That said, some of the biggest expenses in Americans’ budgets have outpaced wage growth, including food (up 27%), housing (up 26%) and transportation (up 28%). This might explain the financial pinch many Americans are feeling, even as overall inflation has slowed significantly over the past two years.
Second,shopping is a major contributor to credit card debt.Many Americans use credit cards to make ends meet, but there are plenty of non-necessities that are contributing to credit card debt. The survey found that 41% of Americans who currently have revolving credit card debt say shopping contributed to their balances, while 30% say the same of travel expenses.
Therefore,there are many causes of credit card debt.In addition to the above,there may be more reasons.In order to reduce the pressure caused by credit card debt in the future,people may really need to consider more financial planning issues.
