More Americans are falling behind on their car loan and credit card payments than at any time in more than a decade, a troubling signal of consumer stress as higher prices and rising borrowing costs are squeezing household budgets, the Washington Post reported. The pain is most acute for lower-income earners, who have largely used whatever they managed to save during the pandemic with the help of government stimulus checks and breaks on obligations such as rent and student loans. “The increase in delinquencies and defaults is symptomatic of the tough decisions that these households are having to make right now — whether to pay their credit card bills, their rent or buy groceries,” said Mark Zandi, chief economist at Moody’s Analytics. Now, as the economy finds its post-pandemic footing, there are signs the hardship for millions of consumers will get worse before it improves. The average credit card interest rate — already at a record high 20.6 percent, according to Bankrate.com — appears likely to keep climbing, as the Federal Reserve indicated it could continue raising interest rates to get inflation under control. Student loan payments that were paused for more than three years are poised to resume in October. And banks and other lenders have been clamping down on credit for months, a process that accelerated after the spring banking crisis sent shock waves through the industry.
