RAPID CITY, SD (KEVN) – Americans were able to pay off a record $ 83 billion in credit card debt in 2020. However, economists say consumers are going to owe a lot more debt by the end of this year. This is because credit card balances are expected to continue to increase until 2022.
Holiday consumer spending this year was dominant compared to 2020, at the height of the pre-vaccination COVID-19 pandemic. However, it does impact people’s credit scores.
Personal finance organization WalletHub says Americans are on track to end up with $ 70 billion in additional credit card debt.
Bonnie Spain, CEO of Credit Consumer Counseling in Black Hills, said people feel more comfortable at this point in the pandemic and are therefore spending more.
“People are more likely to want to take vacations now than they were last year, they are more likely to travel more and do more expensive things than in the past,” said Spain. “People want to go out and eat more. So they are using their credit cards more often now. “
Spain has said the consumer landscape is starting to look like a pre-pandemic economy.
She adds that it is important for individuals to consider their own budgets to protect their credit rating.
“I really believe people need to re-evaluate where their money is going because we are spending so much on gasoline and food, and they say it’s going to continue, it’s going to increase further in January,” Spain said. “So we’ll have to adapt. We don’t want to use the credit just to pay for our basic expenses.
WalletHub reports that an average household card balance is around $ 8,000.
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