RAPID CITY, S.D. (KOTA) – Americans were able to pay off a record $83 billion in credit card debt in 2020. However, economists are saying that consumers are going to owe much more debt at the end of this year. This as credit card balances are expected to continue rising into 2022.
Holiday consumer spending this year was dominant compared to 2020 at the pre-vaccine height of the COVID-19 pandemic. However, this is having an impact on people’s credit scores.
Personal finance organization WalletHub says Americans are on track to end up with $70 billion more in credit card debt.
Bonnie Spain, CEO of credit Consumer Counseling of the Black Hills, said that people are getting more comfortable at this stage in the pandemic, and therefore are spending more.
“People are more likely wanting to take a vacation now than they were last year, they’re more likely to travel more and do more expensive things than they’ve done in the past,” Spain said. “People want to go out and eat more. So, they are using their credit cards more often now.”
Spain said that the consumer landscape is beginning to resemble a pre-pandemic economy.
She adds that it’s important for individuals to take their own budgets into consideration to protect their credit scores.
“I really do believe that people need to reevaluate where their money’s going, because we are spending so much on gas and food, and they say it’s going to continue, it’s going to go up even more in January,” Spain said. “So, we’re going to have to adjust. We don’t want to use credit just to pay for our basic living expenses.”
WalletHub says an average household card balance is around 8 thousand dollars.
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