According to Experian, Americans’ monthly bills are lower than at the height of the COVID-19 pandemic, despite high inflation and rising costs.
The credit reporting company he wrote in a blog post that “total monthly payments are still lower than during the pandemic”. Americans’ average monthly debt payment in June was $ 1,014, $ 31 less than the average amount paid during the pandemic.
That decrease was due to smaller credit card debt payments, which averaged $ 169 in June compared to $ 203 in March 2020. However, mortgages and auto loans both saw an increase in monthly payments to June compared to 2020.
“Credit card balances dropped immediately at the start of the pandemic as consumers stopped spending partially or completely on many goods and services,” Experian said. “This reduction in spending, as well as government aid in the form of stimulus checks and other benefits, have helped bank balances grow.”
If you are considering a personal loan to pay off your credit card debt, it is essential to look for the lowest possible interest rate. You can visit Credible to compare personal loan rates for free without affecting your credit score.
THAT’S WHY IT SHOULD HAVE MORE THAN ONE CREDIT CARD
Lower debt payments than in the pandemic, but on the rise
Nationally, according to Experian, the average minimum credit card and loan payments paid each month by a consumer increased each year in June.
Average monthly payments for credit cards, mortgages, and auto loans all increased from what consumers paid in June 2021, with the largest increase recorded in mortgage payments, which rose by $ 65.
“The rise in average monthly mortgage payments shouldn’t come as a surprise either, as consumers rushed to buy what inventory remained as new home construction that nearly stopped during the pandemic,” Experian said. “However, the vast majority of these mortgages were funded before mortgage rates began to rise in late 2021, further indication that rising prices, not higher mortgage rates, drove most of the ‘increase”.
Experian also noted that most types of loans – auto loans, mortgages, and personal loans – are typically fixed-rate and are not directly impacted by Federal Reserve interest rate increases during the repayment period. However, credit cards are typically issued with floating rates, so rising interest rates could ultimately affect the minimum monthly payments consumers have to make.
Personal loan rates vary considerably from the credit score and the duration of the loan. If you’re curious about what kind of personal loan rates you might qualify for, you can use an online tool like Credible to compare options from different private lenders without impacting your credit score.
4 REASONS TO TAKE A PERSONAL LOAN FOR DEBT CONSOLIDATION
Consumers often rely on credit cards to pay for essentials
According to Experian, consumers often used their credit cards to pay for gas and groceries in June, especially if they earned rewards such as cash, points, or airline miles.
A recent Wells Fargo study said 71% of Americans have premium credit cards.
Nearly half of these cardholders used these earned benefits to offset the price of some daily expenses. And two-thirds (65%) said they worry about credit card rewards now more than ever, the study says.
If you’re looking to cut down on your expenses, you might want to consider using a personal loan to pay off high-interest debt at a lower rate, saving you money every month. You can visit Credible to find your custom interest rate today.
INCREASE IN BALANCE OF PERSONAL LOANS NOT GUARANTEED CREDITS: REPORT
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