U.S. consumers adding credit card debt by billions

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(Photo Suppled/Pixabay)
With inflation putting pressure on people’s budgets and raising concerns about a prolonged recession, U.S. consumers are once again adding new credit card debt by the billions.
Consumers racked up more than $67 billion dollars during the second quarter of this year, according to WalletHub’s latest Credit Card Debt Study. They also predict consumers will add a total of $110 billion in debt during 2022.
The new debt is also likely to become even more expensive, with the Federal Reserve expected to raise its target rate by 75 basis points on September 21.
That could cost people with credit card debt an extra $5.3 billion over the next year. Indiana is ranked 19th for states with the highest credit card debt increase.
Michigan is ranked 12th.
States with the Biggest Debt Increase States with the Smallest Debt Increase
Credit Card Debt Study Key Stats
Record Q2 Increase. Credit card debt increased by almost $67.1 billion during Q2 2022, an all-time record for the second quarter of the year.
Bigger-Than-Normal Buildup. Consumers’ Q2 2022 credit card debt increase was 3.5X bigger than the post-Great Recession average for a second quarter.
Record Annual Projection. WalletHub projects that consumers will end the year with roughly $110 billion more in credit card debt than they started with, which would be close to an annual record.
Fed Rate Hike Survey Key Findings
More Costly Debt. A Federal Reserve interest rate increase on September 21 would cost people with credit card debt an extra $5.3 billion in the next year alone. That’s on top of the $15.3 billion increase already caused by the Fed’s previous rate hikes this year.
Inflation Concerns: 85% of Americans are concerned about inflation right now.
Fed Increases Affecting Wallets: 63% of people say their wallets have been affected by the Fed’s rate hikes this year.
Monthly Expenses Affected: 62% of people say inflation has affected their monthly grocery expenses the most, followed by gas (32%) and housing (6%).
Government Intervention at the Pump: 71% of people think the government should put a cap on gas prices.
Not Recession-Ready: 44% of people do not think they are financially prepared for a recession.
High Inflation Preferable to High Unemployment: 56% of Americans say they would prefer high inflation over high unemployment.
For the full rankings, visit:
https://wallethub.com/edu/cc/credit-card-debt-study/24400/#debt-by-state

1 COMMENT

  1. This is not surprising at all. People are still spending money via credit like everything is fine with the economy. If you pay for everything with a card there is a good chance that you are not affected by inflation/recession because making the minimal payment seems relatively painless. That is until you max your card out and now have no way of paying for your trips through the drive thru, spending money online or what ever seems convenient. At some point that bill comes due and now you are in a mess looking for help to bail you out.

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