Why has the Households’ debt surged to a fresh high by December 2023 according to a report
Analyze the factors leading to the significant increase in households' debt as reported.
1. Easy access to credit: The availability of easy credit options, such as credit cards, personal loans, and buy-now-pay-later schemes, has enticed households to take on more debt.
- Low interest rates: Low borrowing costs have encouraged households to borrow more, as they can afford to service larger loans without significantly impacting their monthly budgets.
- Increased cost of living: Rising expenses, including inflation, housing costs, and healthcare expenses, have pushed households to rely on credit to cover their day-to-day spending.
- Consumer behavior: Changing consumer habits and the desire to maintain a certain lifestyle have also contributed to the surge in households' debt.
- Lack of financial literacy: A lack of understanding about the long-term consequences of debt and poor financial management practices have also played a role in the increase in household debt levels.
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