More and more Americans Credit card debt.
Consumers jointly owe records $1.21 trillion The Federal Reserve Bank of New York recently reported on credit cards.
According to a separate quarterly credit industry data Insights Report From Transunion.
Despite the improvement, the pace of change has slowed significantly, said Charlie Wise, senior vice president of global research and consulting at Transunion. “Consumers are still continuing to use their credit cards, but the amount of their tilt seems to be declining.”
After the pandemic, Higher price High interest rates put pressure on many households and prices are still rising, although Slow speed More than they were before.
this Consumer Price Index – Key inflation barometer – The peak of the pandemic era in June 2022 gradually declines to January is 3%. But still Overtakes the Fed’s 2% target.
Central banks lower their benchmark rate by an overall percentage point in the second half of 2024, but policymakers have been advocating a more cautious pace when evaluating the overall strength of the labor market and the president. Donald Trumppolicy consequences.
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according to Meeting minutes Fed officials announced Wednesday that they agreed they need to see further inflation drop before lowering interest rates, and expressed concern about the impact Tariffs may have.
Meanwhile, Wise said families have largely adapted to the new normal of high prices and high interest rates: “We are seeing less dependence on credit cards to make ends meet.” He said in 2022 and 2023 The growth of credit card debt has slowed significantly after the balance soared.
Credit card violation rateor the past 90 days or more, has declined year by year for the first time since 2020. “That’s a good sign,” Wise said.
How to get rid of credit card debt
Chief Credit Analyst Matt Schulz in Lendingtree and author of “Ask Questions, Save Money, Make More.”
“They went from pretty good things to pretty weird, and that didn’t take much,” he said.
Credit cards remain one of the most expensive ways to borrow money after the Fed’s rope Interest rate hiking Increase the average credit card interest rate to over 20% – close The highest in history.
Even if the Fed lowered its benchmark late last year, average credit card rates Almost no benefit.
“The good news is that there are many options to help you pay off your card debt,” Schultz said.
Borrowers can call their card issuer immediately and ask for a lower interest rate, instead switching to a zero interest balance to transfer credit cards or consolidate and pay off high interest credit instead of waiting for modest adjustments in the coming months with Card Personal loansSchultz suggested.
“If you’re really struggling, an accredited nonprofit credit adviser can make a huge difference,” he said. “But doing nothing is not an option. It just makes things worse.”
