February 8, 2023

Taylor Daily Press

Complete News World

‘Americans Can’t Handle Credit Card Debt’

FinanceJan 25 ’23 at 12:43Author of the book: Remy Cook

There are serious fiscal concerns following quarterly figures for the third quarter in the US. Especially when it comes to home loans. Economist Edin Mujakic says the figures show that gross debt increased by two per cent in the third quarter of last year.

But looking at parts of that debt mountain, he says, one factor stands out. “That’s credit card debt,” he says. ‘They have increased by fifteen per cent. And this is the biggest increase in over twenty years.’

There are serious fiscal concerns following quarterly figures for the third quarter in the US. ( ANP/ Hollandse Hoogte/ Richard Brocken)

Also Read | ‘Inflation will be higher than normal in coming years’

He emphasizes that the peak has not yet been reached. “But with credit card loan interest rates averaging 19.8 percent, the situation is worse than ever,” he continues. “So if you take the average credit card debt of an American household — about $5,500 — and you assume that a household makes the minimum monthly payment, it would take you 16.5 years to pay off the debt.”

Alternatives

According to Mujajic, the option to pay off credit card debt all at once exists, but very few Americans use that option. “They pay the minimum amount per month, and that’s the reason people end up with more debt,” he says. “This is mainly emergency spending. It’s not the case that people book vacations, but a quarter of American households say they use a credit card to meet their needs. It’s so bad there.’

Job market

Additionally, the US is also experiencing labor shortages, but despite the US economy performing well, this has not been reflected in wage growth. “The good news is that you’re seeing that in the U.S. wage growth,” Mujakic continues. “They’re going up 4.5 to 5 percent, but that’s still lower than inflation in the United States.”

Also Read | High Inflation Helps Governments Get Out of Debt: ‘The Easy Way’

According to Mujajic, people at the bottom of society are seeing their incomes and job opportunities increase, but it doesn’t match the increase in food prices,” he continues. “You can say they have to borrow from a bank at five percent interest and pay off credit card debt, but don’t qualify for the loan. We are talking about bad credit holders. From Bank.” Bank.’

credit card?

They qualify for a credit card because it creates a lucrative market, Mujajic says. Because 19.8 percent. So the increase in debt is something that you have to address politically because if you don’t, it will reduce economic growth in the long run. If they are struggling to make ends meet while economic growth is steady, you have to hold your breath for the rest of the year.’

See also  Putin: 'US wants to prolong Ukrainian conflict, destabilize world'