In an age of consumerism and improving economy, Americans are borrowing more as the appetite for household debt grows remarkably. The new data from Federal Reserve shows that Americans owe $1 trillion in credit card debt. U.S. consumers now owe $1.0004 trillion on credit cards, up 6.2% from a year ago and 0.3% from January. It is also the highest amount since January 2009.
Credit-card debt hit the $1 trillion threshold in the U.S., joining auto loans and student debt to cross that level. The US Federal Reserve had raised the interests rate three times since late 2015, making it more expensive for borrowers. While savers might rejoice as the Fed continue to raise interest rates, credit card borrowers will have to pay more in interest monthly. According to WalletHub, the Fed’s three interest-rate increases so far have added $4.3 billion in additional interest charge that credit card debtors have to pay. By reducing your credit card debt or pay off the balance every month, you can keep more money in your pocket instead of giving it to the banks.