A recent poll conducted by Redfield & Wilton Strategies for Newsweek has revealed that a significant 55% of Americans are expressing worry about their ability to repay their credit card debt this year. This statistic comes at a time when the total credit card balance in the United States has reached its highest point since the data began being tracked by the U.S. Federal Reserve. As inflationary pressures persist, many Americans are resorting to credit cards as a means to cope with the rising costs.
While the latest consumer price index (CPI) report from the U.S. Bureau of Labor Statistics does indicate a slight cooling of inflation in the country, Americans are increasingly turning to credit cards to offset the impact of rising prices. In a survey conducted by Newsweek and Redfield & Wilton Strategies, which involved 1,500 American citizens and was carried out on May 31, it was found that approximately 30% of respondents currently carry credit card debt ranging from $1,000 to $5,000. Among Americans aged 22-34, approximately 22% have accumulated debt exceeding $10,000, while the same level of debt is also carried by 21% of U.S. citizens aged 35-44.
Melissa Lambarena, a credit cards expert at Nerdwallet, highlighted the fact that U.S. consumers have been actively relying on credit cards to navigate the financial challenges posed by inflation. Lambarena explained that increasing prices have forced many Americans to depend on their credit cards in order to meet their daily financial needs. The latest statistics from Lendingtree, citing consumer debt data from the Federal Reserve Bank of New York, confirm that credit card debt has now reached a record high for American consumers.
According to a detailed report from Lendingtree, "Americans' total credit card balance in the first quarter of 2023 is $986 billion, according to the latest consumer debt data from the Federal Reserve Bank of New York. This figure remains unchanged from the record number seen in the fourth quarter of 2022, thus keeping the balance at its highest level since the New York Fed began tracking the data in 1999."
The surge in American credit card debt has been significant since the third quarter of 2020, as more and more individuals are relying on credit to cover their expenses. Prior to the pandemic, credit card debt had been steadily rising, but in 2020, it experienced a notable decline as Americans reduced their usage of these financial instruments. However, as the Newsweek survey indicates, 55% of U.S. residents now express concerns about their ability to repay their credit card debt this year. This trend is particularly pronounced among younger age groups, specifically those between the ages of 18 and 24.
Interestingly, the reliance on credit card charges to make ends meet extends beyond the United States. Multiple sources indicate a global surge in credit card debt, with the United States currently holding the highest amount of such debt, followed by Canada, the United Kingdom, and Japan. In contrast, countries like Italy, Brazil, and India have relatively lower average credit card debt. The Newsweek poll suggests that certain experts are advocating for "debt forgiveness" or proposing potential "payment holidays" for American consumers as possible solutions to ease the burden of credit card debt.
