Credit card debt set to hit $1T as inflation continues squeezing Americans
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Americans are drowning in credit card debt as stubborn inflation makes the cost of everyday necessities more expensive.
The New York Federal Reserve Bank's Quarterly Report on Household Debt and Credit, slated for release on Tuesday morning, is expected to show that credit card debt soared to a historic $1 trillion in the three-month period from April through June, according to LendingTree.
That will smash the previous high of $986 billion.
The $1 trillion figure would mark a major reversal from just three years ago when households were rapidly paying off credit card debt with the stimulus payments they received during the COVID-19 pandemic.
CREDIT CARD DEBT RISING IN DOUBLE-EDGED SWORD FOR THE ECONOMY
«I think it’s fairly clear that what we’re seeing now is becoming more and more about people struggling in the face of ongoing inflation and seemingly constant rising interest rates,» Matt Schulz, the chief LendingTree credit analyst, previously told FOX Business. «It's a tough time.»
The rise in credit card usage and debt is particularly concerning because interest rates are astronomically high right now. The average credit card annual percentage rate, or APR, hit a new record of 20.53% last week, according to a Bankrate database that goes back to 1985. The previous record was 19% in July 1991.
The rise in credit card usage and debt is particularly concerning because interest rates are astronomically high right now. (Justin Sullivan/Getty Images / Getty Images)
If people are carrying debt to compensate for steeper prices, they could end up paying more
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