Credit card debt surges in U.S. as high interest rates make it harder to pay off
Americans owe more than a trillion dollars in credit card debt, up 60% from just five years ago. Meanwhile, higher interest rates make debt even more difficult to pay off, a downward spiral causing credit card delinquencies to surge. Economics correspondent Paul Solman explains.
Credit card debt in the United States has skyrocketed, more than doubling in just five years, reaching over a trillion dollars. High interest rates have made it increasingly challenging for individuals to pay off their debts, leading to a vicious cycle of delinquencies and bankruptcy. Personal finance expert Beth Kobliner notes that young people are particularly affected, with credit card debt for this demographic increasing by 190 percent since 2020.
Young adults like Helena Emenalo and Bridget Clinger have found themselves overwhelmed by debt, using credit cards to make ends meet and relying on "buy now, pay later" services. These services, while convenient, often result in significant fees if payments are missed. Kobliner warns that borrowing young can lead to a lifetime of financial strain, emphasizing the importance of financial literacy for future generations.
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