Credit Card & Household Debt Went Their Separate Ways in 2020… For the Same Reason
Data Shows that Low Rates and Stimulus from the Pandemic Pushed Credit Card and Mortgage Debt in Opposite Directions in 2020
Though the economy took a dive in 2020, in terms of debt, the year wasn't all that bad. With the coronavirus proliferating across the nation, the Federal Reserve and US Government took action, causing a decrease in credit card debt but an increase in mortgage debt.
DETROIT, Aug. 19, 2021 /PRNewswire/ -- Benzinga, a fintech media company providing news and data to retail investors and business lovers, publishes its latest data study: Impact of the Pandemic on Individual Debt, State by State.
In 2020, the COVID-19 pandemic brought about several changes regarding not only the economy and fiscal policy but also consumer spending habits. In fact, as more and more people received direct stimulus aid and an increased number of individual loans due to lower interest rates. As a result, Americans were more willing and able to pay off their credit card debt and lower their balance.
Now - switching gears - mortgage debt rose in 2020 across all states (except Connecticut) because of the housing market boom. To add, due to the lower interest rates, mortgage rates fell as well, increasing initial mortgage purchases and refinances, both contributing to higher mortgage debt.
While credit card debt and household debt are related due to the economy and lower rates, they moved differently in 2020. Check out the data study to see how the pandemic impacted these debt levels.
Benzinga often conducts data studies and publishes its findings. Read Which Age Group Has the Most Entrepreneurs, Net Worth, and More for more data like this.
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SOURCE Benzinga
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