On August 19, 2023, Mayor Tomas Regalado raised an alarming concern: the surging credit card debt among Americans. According to the Census Bureau, in just the first week of August, 85.5 million US citizens used their credit cards solely to pay off debts.
For the first time in the country's history, the official credit card debt figure has reached one trillion dollars, an unprecedented milestone. Notably, in the months of May and June, this debt surged by 18 billion dollars compared to previous months. This indicates that current credit card debts are 11% higher than those recorded a year ago.
An even more concerning factor is that the interest rates on credit cards in most banks are set at an annual 20%, applied to the outstanding balance month after month. To put this in perspective, in February, the interest rate was only 14%.
Faced with this critical situation, both economists and government leaders are challenged to determine effective strategies to address and resolve the mounting credit card debts in the United States.