Almost 50% of all credit card holders are carrying credit card debt according to a new Bankrate survey, rising more than 25% over the past two years.
With interest rates climbing during that time period, the data is not a strong signal for consumers. Consumers are using the credit cards to cover emergency expenses that vary from healthcare to more common every day expenses such as car repairs.
Credit card debt is particularly concerning because of high interest rates compared with other financing options. Interest accruals rise steadily when consumers do not keep a 0 balance.
With rising interest rates, Americans have been reluctant to refinance homes and other loans, but credit cards are usually at multiple times the interest rate of even a high interest mortgage.
Experts say that this might be a good time to negotiate interest rates on credit cards as most analysts expect lending rates to go down in 2024. Personal loans tend to have lower interest rates than credit cards, but people with high credit card debt may not qualify due to their credit score.
No issue is on the minds of banking executives more than the momentum on interest rates in 2024.