Hong Kong, Hong Kong S.A.R. - 10/11/2021 — Credit card debt declined between the second quarter of 2020 and the first quarter of 2021. To explain the decline, experts at DC Witter Group point to crisis financial aid, a lack of spending opportunity as a result of Covid-19 regulations, and a general increase in spending caution for many Americans.
Data recently published by New York Federal Reserve has revealed that U.S. citizens are showing a stark increase in spending and subsequent debt as they make up for lost time and money saved during the earlier months of the pandemic.
An economist at DC Witter Group, explains that the shift was anticipated. “As more Americans were vaccinated and started returning to their pre-pandemic routines, we expected to see a collective push to return to normal,” said the DC Witter Group economist. “The danger in rushing to separate from a pandemic lifestyle is a possible renunciation of the financial restraint developed during a difficult period, and that is where we are seeing many Americans err.”
That renunciation is creating a reversal of the earlier credit card debt decline, with about 40% of already indebted Americans having added to their balances after the pandemic emerged. The Federal Reserve Bank of New York reported that credit-card bills grew $17 billion in the second quarter.
“Aside from being a management disaster, credit card debt is incredibly tough to pay off,” says a senior economist at DC Witter Group. “A large portion of those with credit card debt expect to dedicate years of their life to paying it off, while some give up hope altogether.”
There is a silver lining, however. The steady decline in credit card debt throughout the earlier part of the pandemic continues to outweigh the recent hike, meaning that current levels are $140 billion under those of 2019.
Media Contacts:Company Name: DC Witter Group