Revolving debt’s challenge to financial health and one way to help consumers pay it off [Brookings]

Jennifer Tescher and Corey Stone

Credit cards offer consumers convenience as both a payment vehicle and a source of short-term credit. Revolving credit permits consumers to enjoy immediate purchase of goods and services (in the absence of funds or in lieu of tapping savings), to make large ticket purchases without having to save for them in advance, and to smooth consumption in the face of short-term income and expense shocks. But the nature of revolving credit also makes it easy for some to rack up high balances that can become difficult to pay off.

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