Are you feeling the weight of credit card debt piling up? You’re not alone. In the US, the average APR fees on credit cards have soared to a staggering 24.92% as of September 2024. This marks the highest level in history, with interest rates not dropping below 10% since the early 90s.
This surge in credit card interest rates has led countless households into a vicious cycle of debt accumulation. As consumers struggle to pay off existing debt, they find themselves taking on even more debt just to stay afloat. In response to this crisis, politicians like Donald Trump have proposed drastic measures, such as capping credit card interest fees at 10%.
But Trump isn’t the only one looking to tackle this issue. Bernie Sanders previously suggested a 15% cap on interest rates, while Biden aimed to limit late fees to $8. However, banks continue to raise their fees and interest rates, pushing more and more households into financial distress.
Prior to the pandemic, Americans were shelling out a whopping $120 billion annually in credit card interest fees. From 2018 to 2020, the average household was paying $1,000 per year in interest alone. By 2022, this cost had risen to $105 billion, making credit card interest the primary expense associated with card ownership. In just a decade, interest rates on credit cards have doubled, jumping from 12.9% in 2013 to 22.8% in 2023.
Recent data from the Federal Reserve Bank of New York revealed that American credit card debt hit a record high of $1.14 trillion. On an individual level, the average American is carrying $6,329 in personal credit card debt, a 4.8% increase from the previous year. To make matters worse, a report from TransUnion found that over the past two years, Americans have accumulated over $250 billion in credit card debt amidst unprecedented inflation.
As consumers struggle to keep up with rising costs, many are turning to credit cards to cover essential expenses like food, energy, and rent. This has led to a situation where 46% of cardholders are unable to pay off their monthly credit card bills, a 7% increase from the previous year.
In response to this crisis, Trump has proposed a temporary cap on credit card interest rates to provide consumers with some relief. While this move may face pushback from banks, it could give households the breathing room they need to regain control of their finances.
At Extreme Investor Network, we believe in empowering individuals to take charge of their financial future. Stay tuned for more insights and solutions to help you navigate the ever-changing economic landscape.