Register credit card debt will hit Americans mid-2022

In an appearance with “Mornings with Maria,” credit card analyst Ted Rossman predicted that Americans will have reached an all-time high in total credit card debt by the middle of the year.

By the middle of the year, the total amount of credit card debt owed by Americans might reach an all-time high. Credit card balances increased by $52 billion in the fourth quarter of 2021. 

According to Ted Rossman, it took six years to reach rock bottom during the financial crisis. “The only thing that is a little shocking is how quickly this is unfolding,” he adds to the process.

By the middle of the year, we’ll almost certainly be staring at the biggest overall credit card debt that Americans have ever accumulated. 

On the other hand, credit cards have a national average of little more than 16 percent use. By the way, that’s the average of the low end of the range on 100 popular cards, which is the low end of the range on average.

As a result, he estimates that the rate will be between 17 and 25 percent by the end of the calendar year. In addition, “that’s one of the largest margins we’ve ever seen,” says the analyst. “And, sure, the Fed’s rate rises should be transmitted through directly,” he says in conclusion.

TED ROSSMAN

Sadly, no, and I’m not shocked by this. The only unexpected thing is how quickly this is occurring. We’ve noticed this movie before, and it’s about credit card debt falling during and immediately after a recession, rising again and setting new records.

What’s more, it took six years for the economy to reach rock bottom during the economic situation. After then, it took another four years to make the ascent back to the top. 

This time, we’ll be at rock bottom in a little more than a year, and we’ll most likely establish a new record in around a year and a half after that.

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As a result, by the middle of the year, we’ll most likely be looking at the largest level of overall credit card debt that Americans have ever had to deal with.

On the other hand, credit cards have a national average of little more than 16 percent use. By the way, that’s the average of the low end of the range on 100 popular cards, which is the low end of the range on average.

People with superior credit are assessed a higher interest rate. People with poor credit will likely see a 20 percent or a 24 percent interest rate. That represents the mean of the extremes. Even at the low end of the spectrum, the average is a little more than 16 percent.

Compared to the prime rate, this is around 13 percentage points higher. That’s one of the largest margins we’ve ever seen in a single transaction. 

And, certainly, the Fed’s rate rises should be carried through directly to consumers, with rates likely to range between 17 and 25 percent by the end of the year.