Last year, US consumers shelled out nearly 50% more on credit card expenses compared to the year before Biden took office. That’s a staggering increase, putting a strain on family budgets and sparking debates about a supposed cost of living crisis, especially among Republicans.
Credit card interest and fees skyrocketed by a whopping $51 billion during that time, reaching a mind-boggling $157 billion, according to data from US banks reported to the Federal Deposit Insurance Corporation.
But wait, there’s more. Delinquencies on credit card loans are at their highest level in almost 13 years, according to Moody’s Analytics. This, despite banks raking in record profits from credit card lending. It’s a troubling sign of financial distress for many households across the nation.
And it’s not just about numbers. It’s about real people facing real struggles. A recent Bankrate report paints a grim picture: 56% of Americans would struggle to cover a $1,000 emergency expense. Most don’t have enough saved up and would resort to credit cards or borrowing from friends and family.
Mark Hamrick, Bankrate’s senior economic analyst, highlights a deeper issue here. He points to a consumer-based society that prioritizes spending over saving, contributing to the growing debt crisis.
So, what’s the plan? With the Federal Reserve raising interest rates to a 23-year high, the pressure’s mounting. While the central bank isn’t expected to start cutting rates until summer, the clock is ticking.
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