The credit card is the kind of service provided by the banks to the consumers to use as a mode of payment. The benefit is that it has some assigned limit which you will use according to the needs and later you have to pay the bill of the amount utilized. The credit card system may look simple, and for the sake of increasing their money expenditure, people use it.
But before spending, they are unknown that they are putting their feet in a vicious circle of debt. Yes, the amount of the credit card that is left unpaid is also a kind of debt. It directly affects the credit score of the person, which can be dangerous for them. The same situation is now faced by the people of the USA, especially the youths.
Credit usage amid covid-19
The data of the USA alone shows that the people around the country have been out of their jobs from the time of lockdown. Some of them are not getting salaries. Due to this, people have starting feeding on credit cards to pay their bills. Now the thought in people’s minds is that when after the lockdown, they will get back to their jobs, they will easily repay the bills. But the covid is not in control.
IT is continuously increasing from March due to which people are still out of their jobs. It is estimated that there are 120 million credit card users in the US. Out of the very less percentage of people were facing the issues of the credit card debts. But as the lockdown is imposed, the economy of the country is very hardly affected.
According to the surveys, more than 47 percent of people in the world are suffering from credit card bills and debts. They are unable to pay back the amount they have utilized.
It is mainly due to the covid that the people are unable to pay back the debts they have taken. According to the surveys, 60 percent of the people say that they will pay the money back on the monthly payments. The credit card provider has also provided a little relief to only 7 percent of the people.
The Experian agency has released the report with the increase in the number suffering from the debt, the normal debt per person has also increased manifolds. The debt report in April says that the credit card debt is crossing around 14.1 trillion dollars. Most of the people are unemployed, due to which the mortgage loans are also increasing day by day. People cannot pay back the loans on time due to which heavy interests are imposed on them.
In such a hard time, people seek out some help from the government institutions that they make up some space for the jobs. As people will get back to their jobs, they can easily pay back all the loans, and the banking sector’s stability will be regained.