CreditCards.com industry analyst Ted Rossman detailed a recent study that unveiled 44% of Americans are willing to take on discretionary debt in the second half of 2021. Rossman said to expect a spending spike on goods and services on "Mornings with Maria" Thursday and argued it could impact your credit card debt.
TED ROSSMAN: Total credit card debt fell 17% from the end of 2019 through the first quarter of 2021. That is a huge drop. What I'm worried about, though, is that it may not last.
Just like we saw during the Great Recession, people tend to go back to their old ways. And right now we're seeing a big pickup in spending. You just mentioned inflation in your last segment.
I think we could be off to the races here.
We found 44% of U.S. adults say that they are willing to take on debt for discretionary purchases in the second half of the year. And what surprised me is that it's not just services like travel and dining. We knew those were going to surge.
What we didn't realize, though, was that the spending on goods would continue. Lots of people are still planning home renovations, car purchases, furniture or electronics. I really thought those trends would have been more played out at this point and that demand was pulled forward.
But it's not really shifting from goods to services. It's goods and services, which could be good for the economy, but maybe bad for your credit card account.
What surprises me is that people aren't just spending down their savings. They're going beyond that. And so many people are telling us they're willing to take on credit card debt. That's expensive. The average is over 16% and could be headed even higher.
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