(TruthAndLiberty.com) – On Tuesday morning the Quarterly Report on Household Debt and Credit by the New York Federal Reserve Bank is going to be released. It is widely expected that the credit card debt is going to be shown to have reached $1 trillion during the last three-month period which extended from April to June. Previously debt had reached $986 billion.
If credit card debt does end up reaching $1 trillion then that would mark a huge difference from three years ago when most households appeared to be using the stimulus payments and available funds they had during the pandemic to pay off credit card debt.
Chief LendingTree credit analyst Matt Schultz previously stated that what they were witnessing now is that the increasing interest rates and the inflation had led to more people struggling. Because of the high-interest rates, it is even more concerning that users are now relying on credit card debt. The average annual percentage rate for a credit card reached 20.53 percent last week. This is the highest record in more than three decades,when the record in 1991 had been at 19 percent.
People have been using debt as a way of handling the higher prices for goods, however, this means that over time they end up paying significantly more for the same goods. For example, the average American will owe at least $5,000 in debt. If that debt requires 309 months to be repaid and they are making minimum payments on that debt during that time they will end up paying $21,537 over time.
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