US Credit Card Debts, US Credit Cards

By: EconomyWatch   Date: 6 October 2010

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The increasing trend of US credit card debts has been an issue of major concern in the recent times. Slowdown in the US real estate sector, stagnant wages, and many other factors contributed towards accumulation of US credit card debts.

Credit card debt is a kind of unsecured consumer debt. The practice of defaulting or being late on paying the credit card debt is very common among the US consumers. Whenever a credit card user fails to pay the debt on time, the credit card company charges a certain amount as penalty, which in the United States varies from $10 - $40. Successive penalties keep on increasing the credit card debts.

Important Facts about US Credit Card Debts

 

  • As per July 2008 estimate, credit card debts in the United States amount to $962 billion.
  • In the year 2003 around 1.6 million US consumers filed for bankruptcy due to credit card debts.
  • As per the estimate of 2003, around 40% of American households spend more than their earning capacity in a year, thereby adding to the problem of US credit card debts.
  • More than 60% of the credit card accounts in the US do not receive the monthly payment from the cardholders.

More on US Credit Card Debts

Personal consumption plays a pivotal role in driving the US economy and credit cards meet majority of the personal consumption needs of the US consumers. In the year 2006, the US economy alone accounted for 984 million bank-issued MasterCard and Visa credit card. The average rate of interest on all US credit cards was estimated to be 13.08% since November 2007. The revolving debt for the US consumers stood at $904 billion in the month of June 2007. This figure was more than the corresponding figure of the previous year by $879 billion. All these have increased the amount of US credit card debts over the years.

However, the federal government of the United States has taken all the necessary initiatives to reduce the amount of US credit card debts. The US consumers have started paying their credit card debts on time. With this favorable change in consumers’ practice of paying credit card debt, the situation of US credit card debt is expected to improve in near future.


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