According to the Federal Reserve, the revenues of credit card merchants grew by $104B alone for interest and other fees.
Magnify Money shows that the figure has increased by almost 11 per cent from 2017’s $93.7B mark. The company even predicted that this 2019, the amount can go as high as $110B.
Approximately 6 out of 10 Americans have a credit card, which is responsible for the billions of dollars of debt each year. There is a total of $92B credit card debt in 2018 alone, which is alarming for financial experts. The figure shows that more and more people are using plastic cards to pay for everyday expenses, like groceries, shopping and fuel, among other things.
Experts blame it to the trend, as many choose to pay via credit card for convenience and to save money. However, what’s happening is completely different. Consumers or cardholders are obliged to pay more when missing the due date and accumulating more charges. Every swipe of the card can already be a cause of worry as not all Americans are responsible cardholders.
In addition, the interest rate for balances can go as high as 8 to 24 per cent, which leads to even bigger debt.
Given the increasing debt of Americans each year, many are still being optimistic because the unemployment rate in the country is low as well as gross domestic product. What needs to be fixed is simply the spending pattern of Americans and the dependence on the credit cards.