Americans are well-known for adding ridiculous amounts in credit card debt each year, surpassing even $50 billion. However, the pandemic managed to change this somehow, as forced by the recommendation to stay indoors, many users evaluated their spending and reduced their credit card debt.
“The pandemic actually looked to save a lot of people from getting into debt,” reveals WalletHub analyst Jill Gonzalez. “Because of that, we saw the biggest debt pay down that we’ve seen in 35 years.”
Could it be just the beginning of a big change?
According to a study conducted by WalletHub, Americans paid down almost $83 billion in credit card debt back in 2020. And this is a great step towards lowering the ever-increasing amount of credit card debt, experts believe.
“A lot of people were able to save and a lot of people were actually able to pay off debt,” Jill Gonzalez added. “Unfortunately, we don’t think that is going to last. I don’t think we’re going to see that by the end of 2021.”
Americans could soon return to their spending habits
The same survey also found that one out of ten U.S. citizens is looking forward to going on a major shopping spree once the economy shows the first positive signs and stores will reopen, which would be perfectly in line with what happened during the 2009 recession. Obviously, this could make them, again, acquire credit card debt, even more than before the coronavirus pandemic.
Many of the responders revealed that the main reason why the pandemic helped them save money was because they shopped less and remained home. And while some people managed to pay off credit card debt, other focused on covering their student loans.
Again, it will be interesting to observe how this trend will evolve, as, with the vaccination campaigns progressing, there are many signs that things will eventually go back to normal sometime this year and people will be able to resume their usual spending habits.