Debt is hitting home for consumers as interest rates soar
Consumers are racking up credit card debt at a pace not seen in decades as inflation continues to pervade the U.S. economy. In the most recent quarter, which ended in September, consumers’ overall credit card balances increased by 15% — the largest year-on-year increase the New York Federal Reserve has measured in more than 20 years. In aggregate, balances are nearing $1 trillion, not adjusted for inflation, for the first time ever. And while analysts say many U.S. consumers remain in good financial shape thanks mostly to low unemployment, the debt situation is growing dire. As the Federal Reserve has continued to lift interest rates to counter sky-high inflation, credit card rates have climbed to the highest levels ever measured. According to Bankrate, the average annual rate for credit cards is 19.2%, the highest since it began measuring the data in 1985. Bankrate data shows it would take 16 years for someone to pay off the current average credit card balance of $5,474 by making ...