Credit Card Debt Levels Are Peaking..!? Not a good news..?

Sowmiya Sriram
Credit Card Debt Levels Are Peaking..!? Not a good news..?
Credit card spending by indians is at an all-time high. That means indian credit card debt has reached record levels. The main problem is that this will affect the financial stability of the people to a great extent, and the amount of debt has also increased while the savings level of the people is said to be at the worst level in 30-40 years. In india, the festive season starts from the festival of Ganesha Chaturthi, families who are already in excessive debt can repay this if they take additional loans during this period. Banks fear that the number of people who cannot pay will increase. That is, there is a fear that the number of individuals will increase as well as companies defaulting on loans.
Excessive spending: According to the latest RBI data, transactions through credit cards rose to Rs 1.48 lakh crore in August. Notably, it was Rs 1.45 lakh crore in July. In these two months, indians have broken the previous record of Rs 1.40 lakh crore. Expenditure is high in line with the rising debt burden and falling savings among Indians. To cope with this situation, people have started taking excessive loans to fix income stagnation and stress. Amid rising retail sales amid tight cash flow in india, a country with a population of 1.4 billion, people are pointing to the situation as spurring spending through loans.
After the coronavirus pandemic, banks have expanded their balance sheet i.e. lending business through personal loans, a period in which demand for business loans has fallen drastically. Increase in unsecured debt in india will pose a financial stability problem in the country, RBI said. Apart from this, amid high interest rates and high inflation, there is a risk that the unsecured loans sector will expand and many people will be unable to repay the loans. india is not alone: Currently, two major economies, the US and the UK, are facing the problem of hyperinflation. Credit card spending has increased dramatically in both countries, with credit card debt reaching $1 trillion in the United States.
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