America’s credit card balances are historically down. In fact, credit card balances have yet to return to their pre-pandemic levels. This trend signifies a notable change in Americans’ spending habits, as credit card balances and debt have traditionally been one of the biggest financial burdens carried by most Americans.
If you are struggling to end a cycle of credit card debt, you are not alone. In fact, most Americans experience the challenge of paying off their credit cards. If you are struggling to make ends meet because of your credit card debt, you should consult a skilled debt settlement attorney. Here’s a look at the current trends contributing to reduced credit card balances and how experts expect balances to change in the coming months.
Stimulus Checks Used to Pay Off Balances in a Short Time Frame
In the early stages of the pandemic, there was a significant trend of reduced retail spending, accounting for a dramatic decrease in credit card balances. However, as the pandemic has progressed and Americans have started to return to pre-pandemic spending levels, credit card balances remain at historic lows. Many financial experts suggest the continued lows on credit card balances is due to the stimulus checks provided by the government during the pandemic. Experts argue that Americans have used their checks to pay off items in a relatively quick time frame.
Credit Card Balances Vary by Age but Have Dropped Across all Income Brackets
Surprisingly, the drop in credit card balances has stayed consistent across different income brackets. While typically individuals with lower incomes have higher credit card balances, current trends show that credit card balances have dropped across all income demographics. However, experts have noticed that credit card balances are not consistent among various age groups, noting that cardholders aged 20-29 have higher balances than older cardholders. In fact, credit card spending and balances among younger cardholders have almost returned to pre-pandemic levels.
Many Financial Experts Expect an Increase in Credit Card Balances
Many financial experts expect there to be a significant increase in credit card balances over the next couple of months for a variety of reasons. For one, increasing vaccinations and decreasing restrictions have many Americans excited to spend again. Additionally, there’s no talk of another stimulus payment in the works, which many Americans used to pay off their credit card balances. Experts suggest that without this extra cash, many Americans’ credit card balances will see a significant increase. Furthermore, the expanded unemployment benefits the government provided in the early stages of the pandemic are slowly starting to be rolled back. This means that many Americans will lose access to extra cash they were using to pay off debts, such as credit card balances. This will likely lead to an increase in credit card balances as many Americans will use credit cards to make ends meet.
Consult the Skilled Debt Settlement Lawyers at McCarthy Law
Credit card debt creates a cycle of financial burdens that become impossible to manage. It’s important to know that if you are struggling with credit card debt, you are not alone. While dealing with credit card balances can feel stressful and overwhelming, the best thing you can do is take action. Meeting with a skilled debt settlement attorney is a great strategy for getting on top of the situation and understanding your options.
At McCarthy Law, we are dedicated to helping our clients navigate their credit card debt to reach a favorable debt settlement. We understand the overwhelming burden that debt can have on people’s lives and are committed to helping clients end the cycle of credit card debt. To schedule a consultation with one of our skilled debt settlement attorneys, call our office at (855) 976-5777 or fill out our online contact form.
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