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American paid around $83 billion in credit card debt in 2020

As per the latest report shared by WalletHub, Americans had paid a recordable amount of around $ 83 billion in 2020 by their credit cards.

A personal finance website WalletHub released information on Monday that Americans credit card debt by $83 billion by 2020. Amidst COVID-19, the coronavirus crisis has led to better budgeting. Consumers have been reducing debt over decades and saving more than this. Many are taking advantage of low-interest rates to refinance and reduce their monthly bills.

In 2020, Americans have witnessed a recordable paid off by credit card and it is accounted for USD 82.9 billion. This is a major achievement, given that consumers have paid an average amount of USD 54 billion every year in the last decade. During the coronavirus epidemic, most of the country went into quarantine last year. According to WalletHub, The average household debt remains at over $ 8,089 and the US collectively owes more than $ 1 trillion to credit card companies.

Jill Gonzalez, the analyst of WalletHub said, “The second time in the past 35 years we’ve even ended the year owing less credit card debt than we started with”. WalletHub predicts that the credit card debt is expected to reach around $ 50 billion in 2021.

It is projected by many experts that consumer spending may increase again once people are vaccinated and Covid-related restrictions are removed, which may undo some of the recent progress towards paying off debt.

As per the National Retail Federation, the retail sector is expected to grow as an economic indicator seen by 2021. The trade association said that the consumers have a lot of purchasing power that will combine with pent-up demand to provide “accelerants for growth”.

Jill Gonzalez said, “A short-term burst of spending is inevitable” and “the question is which way the pendulum swings in 2022 and beyond”. Furthermore, she said, “My hope is that consumers will internalize lessons learned during the pandemic and showcase a newfound frugality”.

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