Today, Explained We’re drowning in credit card debt
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Jun 12, 2024 
In this discussion, finance journalist Nick Wolney unpacks the staggering reality of over $1 trillion in credit card debt plaguing Americans today. He explores the impact of rising interest rates and the struggles faced by younger generations like Gen Z. Personal stories highlight the challenges of financial instability and the need for improved financial literacy. Wolney also delves into budgeting strategies and the effects of the 2009 CARD Act, emphasizing the urgent need to navigate these complexities for a healthier financial future.
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Record High Interest Rates
- Credit card interest rates are at a record high, averaging 21.59%.
- Retail cards average even higher, around 30%, trapping consumers in debt.
Minimum Payment Misconception
- Many people, even those with financial advisors, misunderstand minimum payments.
- They believe making minimum payments signifies good financial standing, but it leads to accumulating interest.
Tactics for Profitability
- Lowering minimum payments from 5% to 2% and raising credit limits increased profitability for credit card companies.
- These changes resulted in higher average household credit card debt, now around $6,500.