Credit Cards Users Owe a Record $1 Trillion in Debt
By Yehudit Garmaise
Consumers who use plastic at checkout time have sadly soared over $1 trillion to set a new record high of credit card debt in America.
While points, cash-back offers, and other rewards continue to entice many Americans, such schemes can often set the stage for unmanageable credit card debt.
Some experts say inflation may have caused Americans to rely on credit cards to pay for necessary expenses.
To decrease inflation, the US Federal Reserve attempts to curb spending by making borrowing less appealing by hiking interest rates, which now stand at 5.25% to 5.5%.
In response to the Fed’s increase in interest rates, the banks respond by similarly hiking interest rates: now to an astronomical 20%, an unmanageable and unnecessary addition to most people’s expenses.
“To avoid credit card debt, people should use only cash and debit cards,” a finance professor told BoroPark24. “Instead of collecting ‘points,’ consumers should focus on building their savings. People use credit cards to spend money they don’t have. All the points and rewards are not worth the interest debtors end up having to pay when they can’t cover their expenses.”
Those who insist on using credit cards to earn rewards should make sure to pay off their credit card debts not once, but twice a month to make sure they have enough money to pay their bills, the finance professor suggested.
“At the end of the month, the absolute worst thing to is to receive a ‘surprise’ large bill that will just keep accruing ballooning interest: if you cannot pay your bills in full and on time.”