With consumers’ finances under pressure due to inflation, WalletHub, the personal-finance site, released two key reports highlighting additional hurdles to watch out for.
WalletHub’s Credit Card Debt Study found that consumers racked up $87.3billion in new debt during 2021. In addition, WalletHub’s Fed Rate Hike Report revealed that a Federal Reserve interest rate increase on March 16 would cost people with credit card debt an extra $1.6 – $3.2billion in the next year alone.
| Cities with the Biggest Debt Paydown | Cities with the Smallest Debt Paydown |
| Santa Clarita, CA | Bismarck, ND |
| Burlington, VT | Pearl City, HI |
| Pembroke Pines, FL | Augusta, GA |
| Rancho Cucamonga, CA | Casper, WY |
| Moreno Valley, CA | Fargo, ND |
| Riverside, CA | Amarillo, TX |
| Irvine, CA | Lewiston, ME |
| Bakersfield, CA | Corpus Christi, TX |
| Chula Vista, CA | West Valley City, UT |
| Fort Smith, AR | Winston-Salem, NC |
Key Credit Card Debt survey findings:
- Credit card debt rose by $74.1 billion during Q4 2021 – the biggest increase ever.
- The average household credit card balance was $8,590 at the end of 2021.
- The average annual increase in credit card debt over the past 10 years is just $48.5billion.
- The best balance transfer credit cards currently offer 0 per cent APRs for the first 12-21 months with no annual fee and low balance transfer fees.
- Almost half of Americans (47 per cent) say their credit card spending habits went back to pre-pandemic levels in 2022.
- 33 million Americans will have more credit card debt by the end of 2022.
- Women are 35 per cent more likely than men to feel stressed about their credit card debt.
- 9 in 10 Americans say their personal finances are managed better than the federal government.
- More than a third (37 per cent) of people with credit card debt say they would do anything to be debt-free.
Analysing the findings, Jill Gonzalez, an analyst at WalletHub said, “Almost half of Americans (47 per cent) say their credit card spending has returned to pre-pandemic levels. The latest credit card debt statistics support that, as US consumers added a record $74billion in new credit card debt during Q4 2021. Altogether, we added $87billion in new debt during 2021, and according to its estimates, WalletHub projects an increase of more than $100billion in 2022.”
Fed Rate Hike survey key findings:
- 54 per cent of Americans will reconsider their upcoming spending because of the war in Ukraine.
- 88 per cent of Americans are concerned about inflation right now.
- 148 million people think their credit card rates are too high already.
- 55 per cent of consumers think rate hikes are bad for their wallet.
“Around 33 million Americans say they will have more credit card debt by the end of 2022. This shouldn’t be much of a surprise considering the recent trend in credit card debt levels, nearly half of consumers reporting their spending has returned to pre-pandemic levels, inflation, and the war in Ukraine,” Gonzalez continued. “Just because increased debt levels are to be expected does not mean this is a positive development for the economy, though. Continuing to pile on debt will put consumers in an even more dangerous position, and we expect an increase of at least $100billion in credit card debt during 2022.”
