By Casey Quinlan
Americans are racking up credit card debt as they struggle to keep up with the cost of living, and experts say those who earn the least are the hardest hit.
Total credit card balances rose 5.8% from a year ago, to $1.14 trillion, according to a recent New York Fed report. Equifax credit files through June show that credit card delinquency is still rising but that delinquency on consumer finance loans and retail cards fell and auto loan delinquency was flat.
People use credit cards for all kinds of purchases, and despite the stereotype of consumers getting themselves into too much credit card debt so that they could buy a few extra flashy clothes or vacations, many of them are for necessities.
So what does it mean for the economy that the average rate for people with a credit card balance was 22.76% in May, that there is an expansion of financial tech products like “buy now, pay later,” and that many Americans find themselves unable to pay off that debt? It depends on your role in the economy, financial experts and economists say.
