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What to do if your credit card debts increase this year

Credit Cards american-express-Visa Master Card 89024_640Credit card debt will likely increase by around $60 billion during 2021, even after a $56.5 billion first-quarter paydown in 2021.

“People trying to get rid of credit card debt should consider both the spending and repayment sides of the equation,” said Jill Gonzalez, an analyst for WalletHub, a personal-finance website.

“Making a budget that cuts out unnecessary luxuries and maximizes monthly debt payments will be a big help, as will taking steps to boost your income,” Gonzalez said. “The next step is to focus your attention on your most expensive debt, as paying that off first will save you the most money in the long run.”

In 2020, American consumers paid off record-setting amounts of credit card debt. In the first quarter of 2021, consumers continued the trend paying off $56.5 billion in these debts.

However, some areas of the country have bigger payment problems than others. WalletHub compared more than 180 large cities based on how much residents owe to credit card companies and how those balances changed in the first quarter

Cities with the biggest debt paydown

Cities with the smallest debt paydown

Santa Clarita, California

Fargo, North Dakota

New York, New York

Buffalo, New York

Chesapeake, Virginia

Akron, Ohio

Chula Vista, California

Cedar Rapids, Iowa

Pembroke Pines, Florida

Milwaukee, Wisconsin

Pearl City, Hawaii

Toledo, Ohio

Santa Ana, California

Cleveland, Ohio

Virginia Beach, Virginia

Lewiston, Maine

Rancho Cucamonga, California

Madison, Wisconsin

Plano, Texas

Detroit, Michigan

 
“Credit Card Debt Study,” a Wallet Hub study, found the following:

  • Continued debt reduction. In 2020, there was a record paydown of $82.1 billion.
  • Bigger paydown than normal. Consumers’ first quarter 2021 credit card debt paydown was 51 percent larger than the post-Great Recession average for a first quarter.
  • Rising charge-offs. At 2.95 percent for the first quarter of 2021, the credit card charge-off rate is up by 14.3 percent compared to last quarter.


This post first appeared on The Survive And Thrive Boomer Guide, please read the originial post: here

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