• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer

  • Personal Loans
    • Signature Loans
    • Debt Consolidation Loans
    • Wedding Loans
    • Home Improvement Loans
    • Signature Loans
    • Medical Loans
      • Dental Loans
  • Business
    • Business Loans
      • High-Risk Business Loans
    • Business Credit
  • Home Loans
    • Home Equity Loans
    • Home Equity Line of Credit
    • Bad Credit Home Loans
    • First Time Home Buyer Loans
  • Bad Credit Loans
    • Tribal Loans
    • Installment Loans
    • Payday Loans
    • Car Title Loans
    • No Credit Check Loans
    • Emergency Loans
    • Same Day Loans
    • Short Term Loans
  • Auto Loans
    • Bad Credit Car Loans
  • Student Loans
    • Private Student Loans
  • Financial Help
    • Free Credit Score
    • Loan Sharks
    • Debt Relief
      • Debt Management Plan
      • Credit Counseling
    • Credit Repair
      • Credit Repair Companies
    • Calculators
      • Car Title Loan Calculator
      • Motorcycle Loan Calculator
    • Credit Monitoring Services
  • Reviews
    • Lenders
      • Bad Credit
        • Tribal Lenders
Home » Blog » Debt Relief » Why American Credit Card Debt Shrank During The COVID-19 Pandemic

Why American Credit Card Debt Shrank During The COVID-19 Pandemic

August 6, 2020 by Brian Allen

COVID-19: Why Consumer Debt Fell During the Pandemic
Share1
Tweet
Share
Pin
Pocket
Buffer
1 Shares

* GoLoans is reader-supported. When you buy through links on our site, we may earn an affiliate commission

Americans have paid down more than $100 billion in credit card debt since March of 2020, according to the Federal Reserve – bringing total credit card debt below $1 trillion for the first time in 3 years. Why and how did this happen? Let’s take a look.

Pandemic Lockdowns Have Eliminated Many Areas Of Consumer Spending

The initial wave of lockdowns shuttered all non-essential retail businesses, and while spending on eCommerce grew, overall retail spending dropped enormously during the initial wave of the pandemic.

In addition, most professional sporting events have been canceled, many movie theaters remain closed, and bars and restaurants were shut down for weeks and months – and are now open only under restrictions. This has all led to a dramatic decrease in consumer spending.

The CARES Act Provided A $1,200 Cash Injection & Additional Unemployment Payments

The CARES Act provided direct payments of up to $1,200 per household, as well as $600 in additional weekly unemployment benefits to those who lost their jobs due to the COVID-19 pandemic, providing families with the cash they needed to cover emergency expenses like rent, utilities, and groceries, and additional cash that was used to pay down debts like credit cards.

“Shark Tank” Star Kevin O’Leary: Paying Down Debt Is “Key” To Financial Success

Kevin O’Leary, also known as “Mr. Wonderful,” recently shared some advice on CNBC about financial success and the importance of proper budgeting.

Baby Boomer Debt (2020)

Baby Boomer Debt Is Growing (And Not Because Of Mortgages)

Baby boomers have the second-highest debt burden of any generation – a study by Experian has found that people between the ages of 55-73 have an average debt of $95,095.

How to Fix and Repair Your Credit for Free

Credit Repair: Free Guide To Repairing and Building Your Credit

Learn Free “Secrets” to Repair Your Credit. Our Guide Helps You Repair or Establish Credit Fast (and It’s 100% Free)

debt consolidation options for bad credit

Debt Consolidation Tips for Borrowers With Bad Credit

In Debt Up To Your Ears? Here’s How to Get Out of Debt, Even if You Have Bad Credit. Acquiring and trying to pay off debts can seem like a game of whack-a-mole. Just when you think you’re about to pay one off, others pop up in its place. It’s an emotionally and physically exhausting […]
why did my credit score drop after getting a credit card?

Here are 8 Reasons a Credit Score Will Drop

Credit scores are fickle, but not as complicated to understand as some people think. Read these 8 tips to make sure your credit score never drops.

low income families get out of debt

Here’s How Low-Income Families Can Get Out of Debt

Debt can be paralyzing and weigh heavy on anyone’s shoulders, especially when you’re struggling to make ends meet. If you’re feeling like the road to being debt free looks like a long and fruitless one, don’t give up yet! Here are steps you can take to speed up the journey.

Economic Instability Is Encouraging Saving & Paying Down Debt

Though many Americans are living comfortably thanks to the CARES Act, this aid is only temporary, and many are unsure when they will be able to go back to work. This means that most people are choosing to save their money and pay down debt, rather than spend money on discretionary expenses.

This uncertainty is well-founded. Unemployment is still the highest it’s been since the 2007-08 financial crisis, and US GDP (Gross Domestic Product) dropped 32.9% in the second quarter of 2020– this represents the worst single-quarter drop in history.

With coronavirus cases continuing to accelerate across America, it’s still unclear what the future may look like for millions of Americans. Many may have to find bad credit loans in the meantime.

The Future Of Credit Card Debt Is Unclear – With Federal Aid Running Out

The future of credit card debt in America is unclear. But despite massive economic instability due to the COVID-19 coronavirus pandemic, the federal $600/month benefit ran out on July 31, and eviction moratoriums are now being lifted across the country, exposing more than 43 million Americans to the risk of eviction from their homes.

Not only that, but the school year is beginning soon – and many schools are requiring online-only education to help reduce the spread of COVID-19 coronavirus which means childcare costs may increase, and additional spending may be required for back-to-school.

So while Americans may have done well at eliminating debt during the first wave of the pandemic, it’s likely that debt burdens will begin to grow throughout the remainder of the year and beyond as the COVID-19 crisis continues to deepen.

Section 184 Lender Participation List May 2020

Huge List of HUD Section 184 Lenders (2021)

Brian Allen
February 14, 2021
Here’s the Latest List of Section 184 Housing Lenders In this article, we give you one of the largest list of HUD Section 184 lenders. If you qualify, a tribal lender can approve you once you meet all of the requirements. The section 184 loan is available in all counties for the following states: AKAZCACOFLHIIDINKS […]
best motorcycle loans online

Motorcycle Loans: How to Find the Best Lenders Online

Brian Allen
February 8, 2021
How a Motorcycle Loan Works Typically, when you take out a motorcycle loan, the collateral is the motorcycle itself. That means the lender retains the title to the motorcycle. If you don’t make the payments or fail to comply with the other terms of the loan (such as maintaining insurance on the bike), the lender […]
how to find bad credit business loans

A No BS Guide to Find Bad Credit Business Loans

Brian Allen
February 6, 2021

Finding a bad credit business loan shouldn’t have to be difficult. If good credit was required to finance a business, many business owners would never have opened their doors. The truth is that you can acquire funding even if you have bad credit, provided that you go to the right institutions to get it.

Review of Box Home Loans and Mortgages

Box Home Loans Review: Here’s What You Should Know

Brian Allen
February 4, 2021
There are so many different types of home loans and loan programs out there today that it can be hard for the average consumer to keep up. Fortunately, it’s not all as complicated as it seems. If you take a little time to learn the basics, you’ll be much better prepared for whatever type of […]
Brian Allen Financial Writer

Brian Allen

Editor-in-Chief

Brian Allen has been helping people make smarter financial decisions for over 10 years. As the Editor-in-Chief for Goloans, Brian writes about sage financial advice, “how to” articles, and reviews about lenders and creditors.

  • Twitter
  • Facebook
  • Pinterest
  • YouTube
  • LinkedIn
Why American Credit Card Debt Shrank During The COVID-19 Pandemic

Filed Under: Credit Card Debt, Debt Relief Tagged With: credit card debt

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published.

Primary Sidebar

FOLLOW US

  • Facebook
  • LinkedIn
  • Twitter
  • YouTube

Trending Now

celltrion south korea loan sharks

A South Korean Drug Maker Used to Borrow Money from Loan Sharks. He’s Now Worth $10 Billion.

mountain summit financial online reviews

Mountain Summit Financial: Review and Comparison

cash 1 loans

Cash 1 Loan Reviews

uncle warbucks online reviews

Uncle Warbucks Loans Review

is opploans safe and legit

OppLoans Reviews: Here’s What You Should Know

payday loans guide

Payday Loans: The Ultimate Guide on Laws, Rates and Alternative Loan Solutions

Rapital Capital Reviews

my flex cash reviews

My Flex Cash Reviews

target cash now review

Target Cash Now Reviews

loans for people with bad credit

Bad Credit Loans: How to Get a Loan When You Have Poor Credit

Footer

Follow Us

  • Facebook
  • LinkedIn
  • Twitter
  • YouTube

Address

GoLoans
980 N. Federal Hwy
Suite 110,
Boca Raton, Florida 33432
Phone: +1 (561) 962-0091
URL: https://goloans.co/

Advertiser Discoslure

GoLoans is reader-supported. When you buy through links on our site, we may earn an affiliate commission

© 2018–2021 · GoLoans | About | Contact | Terms of Use | Privacy Policy