US credit card debt at record high

The holiday shopping season is traditionally the time when Americans spend the most. It’s common to see people swiping their cards at supermarkets to buy even the most basic items. That’s part of the reason why total credit card debt in the U.S. has just reached a record high.

Rising living costs are forcing many American families to rely on credit cards. Credit cards, once reserved for big purchases like cars or electronics, are now being used for essentials like groceries, gas stations, and even everyday bills.

According to Marketplace, US credit card debt reached an all-time high of $1.23 trillion in the third quarter of this year, up 6% from the same period last year. Inflation has been persistent, with rent, food, energy and insurance prices all climbing, forcing people to "live on their cards".

The fourth quarter is traditionally the biggest shopping season of the year. The New York Post, citing a MoneyLion survey, found that 84% of people plan to use credit cards for holiday spending this year. However, the article notes that the generosity of high-income spenders is "beautifying" the economic picture, but it obscures the fact that many low- and middle-income households are under severe financial pressure.

Not only credit cards, "buy now - pay later" is becoming a "lifesaver" for millions of Americans. Adobe predicts that this holiday season, people may spend more than 20 billion USD through this form. But behind that convenience, "buy now - pay later" is also considered a new debt trap.

The Washington Post analyzed that this model is designed to make users feel comfortable spending, even though they may not have enough money. Young people, who have low credit scores and have difficulty accessing traditional credit cards, are the group that uses "buy now - pay later" the most. Spending is easy, but paying back is difficult. Small installments add up, creating a spiral of debt that can easily get out of control.

On Cyber Monday alone, Americans spent $1.03 billion on “buy now, pay later” deals, the most ever, according to MarketWatch. The surge shows consumers are under significant financial pressure. More worryingly, many are choosing this option simply because they have no other way to shop.

In the US, many people spend money on "wants" rather than "needs." Experts warn that when spending exceeds real income, credit card debt can easily balloon and spiral out of control. During this seemingly bustling holiday season, millions of Americans may be facing unexpected financial troubles.

Source: https://vtv.vn/no-the-tin-dung-tai-my-cao-ky-luc-100251205160836937.htm