After a coronavirus-era reprieve, Americans are borrowing heavily again to keep up with decades-high inflation on essentials such as food, gas and housing. Credit card debt is rising at its fastest clip in more than 20 years, according to the Federal Reserve Bank of New York. Overall, Americans owe $887 billion on their credit cards, a 13 percent increase from a year ago, the Washington Post reported. Now, with the Fed rapidly raising interest rates to contain inflation, families are feeling the pinch of higher borrowing costs, too. Average credit card rates, at 18.7 percent, are at their highest level in 30 years and will probably continue rising, according to Bankrate. The result, for many, is a sense of snowballing despair as debt loads and interest rates spike at the same time. Economists say there is little risk that a pileup of unpaid credit card balances could threaten the U.S. financial system. But the squeeze on families — particularly those who had paid down debt using stimulus checks and pandemic-era savings — will likely be acute.
