Home Consumer debt CCTV script 09/20/22

CCTV script 09/20/22


– This is the script for CNBC’s financial report for China’s CCTV on September 20, 2022.

The CreditCards.com report released on Monday shows that a growing number of US consumers are taking on longer-term credit card debt. Let’s look at the specific data first.

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Forty percent of credit card debtors in the United States say they have been in debt for more than two years, 28% for more than three years and 19% for more than five years, while 8% say they do not even remember how long they’ve been in credit card debt.

There are various reasons for the perpetuation of debt, one of which is emergency expenses. According to the report, 46%, or almost half, of credit card debtors said the main reason for getting into debt was an urgent need for money or an unforeseen situation.

Another important reason is the rising cost of living. Due to high prices, many Americans borrow by credit card to pay for various living expenses.

In the second quarter of this year, data from the New York Federal Reserve showed that US consumer credit card debt, totaling $887 billion, $46 billion more than in the first quarter and also up 13% from a year ago. This is the largest increase in 20 years. Meanwhile, in the second quarter, U.S. consumers opened 233 million new credit card accounts, the most since 2008.

And in addition to high inflation, consumers are also affected by high interest rates. People are spending all their savings and turning to credit to spend, but the Federal Reserve has raised interest rates to curb inflation and drive up credit card repayment rates.

The latest data shows that over the past five months, the average interest rate on credit card payments in the US market has risen from 16.5% in May to 18.1% in September. Economist Richardson described this as a “double whammy”.

This means that consumers not only have to bear the burden of high prices, but they also have to pay more money on top of that to pay off the rising cost of borrowing.

Emergency spending, high inflation and high interest rates are making it harder for consumers to get out of debt. And if the Fed continues to raise rates by 75 basis points this week, as the market expects, Americans with long-term card debt will face higher repayment balances, which means that it will take them longer to repay their debt. And we will be watching closely.